The dollar volume of all mortgages – purchase and refinance combined – originated in 2016 was nearly $2 trillion, a 15 percent increase over the 2015, according to CoreLogic. The number of all mortgages originated last year increased 10 percent from 2015 to just shy of eight million mortgages.
Last year’s originations were tilted slightly toward refinances, which jumped year-over-year by 19 percent in dollars and 13 percent in number and accounted for just over half of mortgages originated in 2016. Last year’s purchase originations increased year-over-year by 11 percent in dollars and 7 percent in number. The purchase originations increase was due to an increase in home sales, a decrease in the share of homes purchased with all cash, and strong home price appreciation, the report stated.
CoreLogic public records data on mortgage originations usually aligns well with data disclosed as part of the Home Mortgage Disclosure Act (HMDA)tra. CoreLogic’s estimate of mortgage originations was 2 percent below the HMDA estimate. HMDA typically under counts total market originations because some lenders are exempt from HMDA reporting, and many analysts estimate that lenders reporting under HMDA represent about 95 percent of the total market. Taking into account under coverage, CoreLogic estimates that total market originations for 2016 were approximately $2.1 trillion.
Additional highlights and key points from this report include:
- The mortgage origination numbers in this post refer to first-lien, single-family originations.
- HMDA requires many financial institutions to publicly disclose information about mortgages. HMDA was originally enacted by Congress in 1975 and is implemented by Regulation C. The Dodd-Frank Act transferred HMDA rulemaking authority from the Federal Reserve Board to the Consumer Financial Protection Bureau on July 21, 2011.
- This calculation includes the share of non-delinquent, fixed-rate, 30-year mortgages with current mortgage rates above 5 percent.
While there was a sizable increase in mortgage originations in 2016, increases in mortgage rates over the past year and the dwindling number of mortgages with interest rates above the current market rate should cause a decrease in mortgage originations in 2017. The average 30-year mortgage interest rate in 2016 was 3.65 percent, and through mid-August of this year it’s averaged 4.05 percent. Low mortgage rates last year encouraged many borrowers to refinance, and as of April 2017, only 10 percent of outstanding mortgage debt had have high enough mortgage rates to make refinancing a money-saving option.