He said: “Many forecasts expected purchase loans to remain strong in 2022, and even increase in both the number of loans originated and the dollar volume of those loans. The weakness in purchase loan activity shows just how much of an impact the combination of escalating home prices and rising interest rates have had on borrower activity this year.”
One product that bucked the trend was home-equity lending, which increased by 6% in the first quarter of this year and by 28% annually to 249,900.
In addition, so-called HELOC mortgages represented 9% of all first-quarter residential loans, up from 7% in the fourth quarter of 2021 and 5% in the first quarter of last year.
The report, however, concluded that the “continued shrinkage in overall residential lending” during the first quarter “re.rced a stark reversal for the mortgage industry following a near-tripling of activity from early 2019 through early 2021”.
It cited “multiple forces” that would continue to impact on the housing market, including 30-year mortgage rates that have risen past 5%, the ongoing tight supply of homes for sale around the US “that limits the number of home purchases”, as well as rising inflation and “other uncertainties surrounding the US economy”.