A nine-year high in quarterly home-purchase financing drove overall mortgage originations to the highest level in three years.
From April 1 through June 30 of this year, there were
1.923 million U.S. first-lien mortgages that were originated for $518 billion.
That turned out to be the most quarterly residential loan volume since the second-quarter 2013, when production was $540 billion.
Those details were provided to Mortgage Daily by Black Knight Financial Services. The data can be purchased through Black Knight’s McDash Online service.
In the first quarter of this year,
1.483 million U.S. mortgages were originated for $399 billion, while the volume total came to $504 billion during the second quarter of last year.
The quarter-over-quarter surge was driven by purchase financing, which totaled $297 billion during the second-quarter 2016 — the most since the second-quarter 2007’s $324 billion.
Quarterly purchase-money production leapt
52 percent from three months earlier and was 6 percent better than a year earlier.
But despite the surge, the
Jacksonville, Florida-based company noted that the rate of growth is slowing.
“We are seeing a deceleration in purchase market growth on an annual basis at approximately six percent growth over Q2 last year, but down from over 20 percent growth for most of 2015,” Black Knight said.
The data indicated that two-thirds of in the latest period’s purchase financing was
to borrowers with credit scores of at least 740.
The most year-over-year growth, 13 percent, was to borrowers whose scores were between 700 and 739.
Borrowers with scores less than 700 accounted for 15 percent of purchase-money business, and less than 5 percent had scores of no more than 660 — marking “the lowest share of low-credit purchase lending seen, dating back to at least 2000.”
Purchases accounted for 57 percent of second-quarter 2016 production, while the remaining 43 percent was refinance.
Refinance originations totaled $221 billion during the three months ended June 30, 2016, up 8 percent from the first quarter of this year but slipping a percent from the same quarter in 2015.
Black Knight noted that during this year and last year, nearly three-quarters of refinances were made to borrowers with credit scores that were less than 740. Currently the ratio is only around a third.
