SOURCE: RealtyTrac

RealtyTrac

May 12, 2016 00:01 ET

Q1 2016 U.S. Home Loan Originations Down 8 Percent From a Year Ago Driven by 20 Percent Drop in Refinance Originations

Purchase Originations up 3 Percent, HELOC Originations Increase 10 Percent; HELOC Dollar Volume Jumps 45 Percent Thanks to Higher Average Loan Amounts

IRVINE, CA--(Marketwired - May 12, 2016) - RealtyTrac® (www.realtytrac.com), the nation's leading source for comprehensive housing data, today released its Q1 2016 U.S. Residential Property Loan Origination Report, which shows 1.4 million (1,415,511) loans were originated on U.S. residential properties (1 to 4 units) in the first quarter of 2016, down 12 percent from the previous quarter and down 8 percent from a year ago to the lowest level since the first quarter of 2014.

The loan origination report is derived from publicly recorded mortgages and deeds of trust collected by RealtyTrac in more than 950 counties accounting for more than 80 percent of the U.S. population.

The year-over-year decrease in total originations was driven by a 20 percent year-over-year decrease in refinance originations even while purchase originations increased 3 percent from a year ago and Home Equity Line of Credit (HELOC) originations increased 10 percent from a year ago.

"After a surprisingly strong 2015, the mortgage refi market started running out of steam in the first quarter of 2016 despite lower mortgage interest rates," said Daren Blomquist, senior vice president at RealtyTrac. "Meanwhile the purchase loan market continued the pattern of slow-and-steady growth that it has been following the past two years, and HELOC originations increased on a year-over-year basis for the 16th consecutive quarter, showing that borrowers are regaining both home value and the confidence needed to increasingly leverage their home equity."

Dallas, Louisville, Seattle, Sacramento, Columbus with biggest HELOC increase

Among 50 metropolitan statistical areas with at least 5,000 total loan originations in the first quarter, those with the biggest year-over-year percentage increase in HELOC originations were Dallas, Texas (up 35 percent); Louisville, Kentucky (up 28 percent); Seattle, Washington (up 25 percent); Sacramento, California (up 25 percent); and Columbus, Ohio (up 23 percent).

Other metro areas with a 20 percent or more increase in HELOC originations from a year ago were San Antonio, Texas (up 23 percent); Orlando, Florida (up 23 percent); Portland, Oregon (up 22 percent); Cincinnati, Ohio (up 21 percent); and Tampa, Florida (up 20 percent).

"Loosening credit, low interest rates and the first time millennial buyers moving into the South Florida real estate market all add up to an 8 percent increase in purchase loan originations for the first quarter this year over last year's first quarter," said Mike Pappas, CEO and president at The Keyes Company, covering South Florida. "Our rising prices and increasing equity are giving confidence to homeowners as we have seen HELOCs increase 12 percent year-over-year."

Top 10 HELOC Loan Originators Q1 2016

Company   HELOC Originations   1-Year Pct Change     5-Year Pct Change  
Bank of America   24,033   12 %   287 %
Wells Fargo   18,513   1 %   20 %
US Bank   14,433   18 %   61 %
JP Morgan Chase   9,349   36 %   275 %
Citizens Bank   8,069   340 %   201 %
PNC Bank   6,969   -1 %   22 %
TD Bank   4,284   75 %   49 %
BB&T   4,245   3 %   35 %
KeyBank   2,817   6 %   55 %
Boeing Employees Credit Union   2,567   67 %   113 %

Baltimore, Tucson, Louisville, Minneapolis, Nashville with biggest purchase loan increase

Metro areas with the biggest year-over-year percentage increase in purchase originations were Baltimore, Maryland (up 26 percent); Tucson, Arizona (up 18 percent); Louisville, Kentucky (up 17 percent); Minneapolis-St. Paul (up 14 percent); and Nashville, Tennessee (up 14 percent).

Other metro areas with a more than 10 percent increase in purchase loan originations from a year ago were Washington, D.C. (up 13 percent); Cleveland, Ohio (up 13 percent); Atlanta, Georgia (up 12 percent); Indianapolis, Indiana (up 12 percent); Kansas City (up 11 percent); St. Louis (up 11 percent); and Chicago (up 11 percent).

Cincinnati, Philadelphia, Milwaukee, Raleigh, Salt Lake City with biggest refi decrease

Metro areas with the biggest year-over-year percentage decrease in refinance originations were Cincinnati, Ohio (down 35 percent); Philadelphia, Pennsylvania (down 32 percent); Milwaukee, Wisconsin (down 32 percent); Raleigh, North Carolina (down 31 percent); and Salt Lake City, Utah (down 29 percent).

Other metro areas with a 25 percent or bigger decrease in refinance originations from a year ago were Oxnard-Thousand Oaks-Ventura, California (down 28 percent); St. Louis (down 28 percent); Sacramento, California (down 28 percent); Tucson, Arizona (down 27 percent); Louisville, Kentucky (down 26 percent); Chicago, Illinois (down 26 percent); Richmond, Virginia (down 26 percent); San Diego, California (down 25 percent); and Honolulu (down 25 percent).

Loan origination dollar volume up 5 percent as HELOC dollar volume jumps 45 percent

Although the number of originations decreased from a year ago, the estimated total dollar volume of originations increased thanks to higher average loan amounts. There was an estimated $444 billion ($444,560,103,469) in total loan origination dollar volume in Q1 2016, up 5 percent from the previous quarter and up 5 percent from a year ago -- the fifth consecutive quarter with a year-over-year increase in loan origination dollar volume.

The total dollar amount of purchase loans originated in the first quarter was an estimated $146 billion ($145,693,394,297), down 11 percent from the previous quarter but up 8 percent from a year ago. The total dollar amount of refinance loans originated in the first quarter was an estimated $204 billion ($203,593,423,522), up 8 percent from the previous quarter but down 9 percent from a year ago. The total dollar amount of HELOCs originated in the first quarter was an estimated $95 billion ($95,273,285,650), up 34 percent from the previous quarter and up 45 percent from a year ago.

FHA loan share increases annually for fifth consecutive quarter

Among all purchase and refinance loans, 17.5 percent were FHA loans, 8.3 percent were VA loans, 0.8 percent were construction loans, and the remaining 73.4 percent were other loan types, including conventional.

FHA loans as a share of all loan originations increased 7 percent from a year ago while the VA loan share were up 5 percent and construction loans were up 19 percent. The FHA loan share has increased for five consecutive quarters, and in 10 of the 11 last quarters.

Report methodology

RealtyTrac analyzed recorded mortgage and deed of trust data for single family homes, condos, town homes and multi-family properties of two to four units for this report. Each recorded mortgage or deed of trust was counted as a separate loan origination. Dollar volume was calculated by multiplying the total number of loan originations by the average loan amount for those loan originations.

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About RealtyTrac

RealtyTrac is a leading provider of comprehensive U.S. housing and property data, including nationwide parcel-level records for more than 130 million U.S. properties. Detailed data attributes include property characteristics, tax assessor data, sales and mortgage deed records, distressed data, including default, foreclosure and auctions status, and Automated Valuation Models (AVMs). Sourced from RealtyTrac subsidiary Homefacts.com, the company's proprietary national neighborhood-level database includes more than 50 key local and neighborhood level dynamics for residential properties, providing unrivaled pre-diligence capabilities and a parcel risk database for portfolio analysis. RealtyTrac's data is widely viewed as the industry standard and, as such, is relied upon by real estate professionals and service providers, marketers and financial institutions, as well as the Federal Reserve, U.S. Treasury Department, HUD, state housing and banking departments, investment funds and tens of millions of consumers. In January 2016, RealtyTrac announced the beta launch of its new consumer focused, mobile first, property report website, HomeDisclosure.com, which provides real estate consumers and professionals alike, detailed pre-diligence data for nearly 120 million U.S. homes.

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