Mortgage Lending Falls in Fourth Quarter of 2022

When mortgage rates hit a nearly 20-year high in 2022, it’s not surprising that mortgage lending dropped.

In the last quarter of 2022, ATTOM found that 1.52 million mortgages were originated, representing 25% of properties, down 24% from the third quarter and a decrease of 55% year over year. This is the lowest number since the beginning of 2014. As mortgage rates reached 7%, the site found that $476 billion worth of mortgages were obtained in the fourth quarter, down 27% from the third quarter and 57% year over year. The report found that mortgage lending dropped across the U.S. year over year in every metro and decreased in 99% of metros quarterly. In 43% of counties, it dropped 25% or more quarter to quarter.

Just 496,221 mortgages were refinanced, dropping 27% from the prior quarter and 73% year over year, decreasing to $158 billion, representing the biggest yearly decrease in at least two decades. It fell quarterly in 97% of metros and dropped annually in 100% of metros. In 55% of metros, the percentage of refinances dropped at least 25% or more year over year.

Home-equity lending also fell 16% to 313,973. However, HELOC loans represented 20.7% of all loans in the fourth quarter of 2022. While the 313,973 loans are down 16% from the third quarter, they are up 32% year over year. They represented $60 billion in the fourth quarter, down from 72% billion n the third quarter (17%), but up from $47.2 billion (27%) from a year earlier.

Both FHA and VA loans saw a slight uptick in originations. FHA loans represented 12% of all loans in the fourth quarter or 181,324 loans, up 0.6% from the last quarter and up 2.1% year over year. Likewise, VA loans represented 5.3% of all loans or 80,061 loans, up 0.1% from the third quarter, but down 0.7% year over year.