Here’s another sign that the housing market is slowing: The number of new home loans in Dallas-Fort Worth and nationwide is dropping.
New home loan issuance in the United States fell in the third quarter, the second consecutive decline.
“This is the first time in more than two years that total loans have declined in two consecutive quarters,” analysts at Attom Data Solutions reported. “Most notably, this was the first time since at least 2000 that lending activity has declined in the second and third quarters, which are typically the peak buying periods.”
In the D-FW zone, the number of mortgage loans taken out in the third quarter is down by more than 25% compared to a year ago.
Mortgages for home purchases and refinancing have declined. Attom Data Solutions recorded 24,606 home purchase loans, compared to 41,029 local property purchase loans in the third quarter of 2020.
âIt appears Dallas has been on a downtrend for purchase loans since last year,â an Attom Data spokesperson said in an email.
The slowdown in mortgage lending activity in the region matches the recent decline in used home purchases in North Texas.
In addition, more migrants in the region and real estate investors are paying their purchases in cash instead of taking out mortgages.
Sales of North Texas single-family homes by realtors have declined year over year in each of the past four months. And home sales totals for the region for all of this year are down slightly from the first 10 months of 2020.
Lenders nationwide took out $ 1.15 trillion in mortgages in the third quarter of 2021, 11% more than a year earlier but 6% less than in the second quarter, according to Attom Data Solutions .
The biggest drops in mortgage activity were in refinancing, which still represents more than half of loan volumes nationwide.
âIt increasingly appears that homeowners’ voracious appetites for refinancing deals have subsided significantly while purchase loans have also declined,â Attom Data’s Todd Teta said in the new report. âIt is still too early to tell if the trends point to major changes in lending patterns or the larger boom in the housing market.
“But the drop is significant, especially for the purchase of a home, which could suggest an impending slowdown in the housing market.”
Mortgage lending activity fell in the third quarter in more than 85% of Attom Data surveys of metropolitan areas in the United States.
The number of home loans has declined in all of Texas’ major markets. Austin recorded the largest decline from a year ago, with the number of new mortgages falling more than 30% in the third quarter.
Mortgage activity in Houston is down 21% and in San Antonio there were about 10% less home loans than in the third quarter of 2020.
While the number of home loans in the country has declined, the total value of mortgages made this year has continued to increase due to the sharp increase in house prices.
Home costs in the Dallas area are up 25% from a year ago in the latest S&P CoreLogic Case-Shiller Home Price Index.