Smart Borrower Blog

Mortgage Originations Jump 75 Percent from Last Year


Jul 1st, 2015 @ 8:16 PM by Amber Nelson


Low interest rates and increased inventory helped the number of U.S. mortgage origination balances skyrocket almost 75 percent in the first quarter of this year, according to the Equifax National Consumer Credit Trends Report.

Mortgages originated in the 2015 first quarter totaled $466 billion, up 74.4 percent from the first quarter of 2014. “The drop in mortgage rates that began in the fourth quarter of last year kicked off a refinance boomlet that accelerated in the first quarter, as rates fell further, averaging just 3.7% for the first three months of this year,” said Amy Crews Cutts, chief economist at Equifax. “While rates have recently reversed that trend and are back up to about 4%, they remain extremely low historically. These rates, coupled with a housing market that is showing signs of vigor, should carry the mortgage business over the summer.”

An increase in the balances of first, or primary, mortgages led the jump with a growth of 79.9 percent from the first quarter of last year. Secondary home loans saw more modest growth. Home equity lines of credit increased by 30 percent to $30.9 billion and new home equity installment loans rose 13.6 percent to $5.0 billion.

Fewer of those originated mortgages went to borrowers with poor credit, according to the report. Just 3.1 percent of all the new originated balances went to those with credit scores below 620 – considered subprime – a slight decrease from the 2014 first quarter of 3.5 percent.

“While home sales are hopping, Equifax data also indicates that lending conditions remain very tight, with just 4.5% of new first mortgage accounts going to consumers with credit scores below 620… In the first quarter of 2008, over 10% of first mortgages went to subprime-credit borrowers,” Cutts explained.

The Equifax report gathered its information from its database of over 210 million consumers.

About Amber Nelson
Amber Nelson is a seasoned mortgage industry writer and a regular contributor to Loan.com and Mortgage101.com.

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