Pointing to a slowdown — fewer new home loans in D-FW and across U.S.
Here’s another sign that the housing market is slowing: New home loan numbers are falling in Dallas-Fort Worth and across the country.
New US home loan issuance declined for the second consecutive quarter for the third quarter.
“It was the first time in more than two years that total lending has declined for two consecutive quarters,” reported analysts at Attom Data Solutions. “Most notably, it was the first time in a year since at least 2000 that lending declined in both the second and third quarters, which is usually the main buying season.”
In the D-FW area, the number of home loans taken out fell by more than 25% in the third quarter compared to the previous year.
Both home purchase and refinancing mortgage loans fell. Attom Data Solutions recorded 24,606 loans for home purchases in the third quarter of 2020 compared with 41,029 mortgages for local property purchases.
“It appears that Dallas has seen a downward trend in purchase credits since last year,” an Attom Data spokesman said in an email.
The slowdown in home loan activity in the area is in line with recent declines in used home purchases in North Texas.
In addition, more migrants to the area and real estate investors are paying cash for their purchases instead of taking out mortgages.
Real estate sales of single-family homes in North Texas have declined in each of the past four months compared to the previous year. And total sales for the area for the whole year are down slightly from the first 10 months of 2020.
National lenders raised $ 1.15 trillion in mortgages in the third quarter of 2021, 11% more than a year earlier but 6% less than in the second quarter, according to Attom Data Solutions.
The biggest declines in home finance have been in refinancing, which still accounts for more than half of the nation’s loan volume.
“It is starting to look like the insatiable appetite of homeowners for refinancing has dropped significantly, while lending has also fallen,” said Todd Teta of Attom Data in the new report. “It is too early to say whether the trends point to major changes in lending behavior or the broader real estate market boom.
“But the decline is significant, especially in home purchases, which could indicate an impending slowdown in the real estate market.”
Residential real estate lending declined in more than 85% of metropolitan areas in the third quarter.
Home loan numbers have declined in all major Texas markets. Austin saw the biggest year-over-year decline, with the number of new mortgages falling more than 30% in the third quarter.
Houston mortgage activity declined 21% and San Antonio home loans fell about 10% compared to the third quarter of 2020.
While the number of home loans has declined across the country, the total value of mortgage loans continued to rise this year due to the sharp rise in home prices.
In the latest S&P CoreLogic Case-Shiller House Price Index, home equity in the Dallas area increased 25% year over year.
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