Residential mortgage volume fell 8% in the third quarter of 2021, compared to second quarter, according to ATTOM’s 2021 U.S. Residential Property Mortgage Origination Report for the third quarter. In all, 3.59 million mortgages were secured by residential property (1 to 4 units) in the quarter, which was up 3% from the same quarter in 2020. 

The company indicated that this quarter’s decline was the second in a row and pointed to two unusual patterns developing in the lending industry.

The third quarter volume marked the first time in more than two years that total lending decreased in two consecutive quarters. More notably, it was the first time in any year since at least 2000 that lending activity declined in both the second and third quarters, which are typically peak buying seasons.

That pattern emerged amid declines in both refinance and purchase lending which more than made up for a bump up in home-equity lines of credit.

Overall, with average interest rates remaining below 3% for 30-year home loans, lenders issued $1.15 trillion worth of mortgages in the third quarter of 2021. That was up annually by 11%, but down quarterly by 6%. The quarterly decrease in the dollar volume of loans was the first since the early part of 2020.

On the refinance side, 1.99 million home loans were rolled over into new mortgages during the third quarter of 2021, a figure that was down 13% from the second quarter and down 3% from a year earlier. The total number of refinance mortgages has declined for the second straight quarter, while the quarterly decrease was the largest in three years. Refinance mortgages remained a majority of all residential lending activity during the third quarter of 2021. But that portion dipped to 55%, down from 59% in both the second quarter of 2021 and the third quarter of 2020.

The continued dip in total loan activity during the third quarter represented a growing sign that the nation’s appetite for new home loans is easing – and that the nation’s decade-long housing market boom could even be cooling off, the company said.

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