The number of loans originated on U.S. residential properties dropped 12% in the first quarter of 2016 from the previous quarter, according to RealtyTrac’s Q1 2016 U.S. Residential Property Loan Origination Report.

In the first quarter, 1.4 million loans were originated, which is the lowest level since the first quarter of 2014 and down 8% year-over-year, which was driven by a 20% year-over-year decrease in refinance originations even while purchase originations increased 3% from a year ago and Home Equity Line of Credit (HELOC) originations increased 10% from a year ago.

“After a surprisingly strong 2015, the mortgage refi market started running out of steam in the first quarter of 2016 despite lower mortgage interest rates,” said Daren Blomquist, senior vice president at RealtyTrac. “Meanwhile the purchase loan market continued the pattern of slow-and-steady growth that it has been following the past two years, and HELOC originations increased on a year-over-year basis for the 16th consecutive quarter, showing that borrowers are regaining both home value and the confidence needed to increasingly leverage their home equity.”

More from the report:

Dallas, Louisville, Seattle, Sacramento, Columbus with biggest HELOC increase
Among 50 metropolitan statistical areas with at least 5,000 total loan originations in the first quarter, those with the biggest year-over-year percentage increase in HELOC originations were Dallas, Texas (up 35%); Louisville, Kentucky (up 28%); Seattle, Washington (up 25%); Sacramento, California (up 25%); and Columbus, Ohio (up 23%).

Other metro areas with a 20% or more increase in HELOC originations from a year ago were San Antonio, Texas (up 23%); Orlando, Florida (up 23%); Portland, Oregon (up 22%); Cincinnati, Ohio (up 21%); and Tampa, Florida (up 20%).

“Loosening credit, low interest rates and the first time millennial buyers moving into the South Florida real estate market all add up to an 8% increase in purchase loan originations for the first quarter this year over last year’s first quarter,” said Mike Pappas, CEO and president at The Keyes Company, covering South Florida. “Our rising prices and increasing equity are giving confidence to homeowners as we have seen HELOCs increase 12% year-over-year.”

Top 10 HELOC Loan Originators Q1 2016

Company
HELOC Originations
1-Year Pct Change
5-Year Pct Change
Bank of America
24,033
12%
287%
Wells Fargo
18,513
1%
20%
US Bank
14,433
18%
61%
JP Morgan Chase
9,349
36%
275%
Citizens Bank
8,069
340%
201%
PNC Bank
6,969
-1%
22%
TD Bank
4,284
75%
49%
BB&T
4,245
3%
35%
KeyBank
2,817
6%
55%
Boeing Employees Credit Union
2,567
67%
113%

Baltimore, Tucson, Louisville, Minneapolis, Nashville with biggest purchase loan increase

Metro areas with the biggest year-over-year percentage increase in purchase originations were Baltimore, Maryland (up 26%); Tucson, Arizona (up 18%); Louisville, Kentucky (up 17%); Minneapolis-St. Paul (up 14%); and Nashville, Tennessee (up 14%).

Other metro areas with a more than 10% increase in purchase loan originations from a year ago were Washington, D.C. (up 13%); Cleveland, Ohio (up 13%); Atlanta, Georgia (up 12%); Indianapolis, Indiana (up 12%); Kansas City (up 11%); St. Louis (up 11%); and Chicago (up 11%).

Cincinnati, Philadelphia, Milwaukee, Raleigh, Salt Lake City with biggest refi decrease
Metro areas with the biggest year-over-year percentage decrease in refinance originations were Cincinnati, Ohio (down 35%); Philadelphia, Pennsylvania (down 32%); Milwaukee, Wisconsin (down 32%); Raleigh, North Carolina (down 31%); and Salt Lake City, Utah (down 29%).

Other metro areas with a 25% or bigger decrease in refinance originations from a year ago were Oxnard-Thousand Oaks-Ventura, California (down 28%); St. Louis (down 28%); Sacramento, California (down 28%); Tucson, Arizona (down 27%); Louisville, Kentucky (down 26%); Chicago, Illinois (down 26%); Richmond, Virginia (down 26%); San Diego, California (down 25%); and Honolulu (down 25%).

Loan origination dollar volume up 5% as HELOC dollar volume jumps 45 %
Although the number of originations decreased from a year ago, the estimated total dollar volume of originations increased thanks to higher average loan amounts. There was an estimated $444 billion ($444,560,103,469) in total loan origination dollar volume in Q1 2016, up 5% from the previous quarter and up 5% from a year ago — the fifth consecutive quarter with a year-over-year increase in loan origination dollar volume.

The total dollar amount of purchase loans originated in the first quarter was an estimated $146 billion ($145,693,394,297), down 11% from the previous quarter but up 8% from a year ago. The total dollar amount of refinance loans originated in the first quarter was an estimated $204 billion ($203,593,423,522), up 8% from the previous quarter but down 9% from a year ago. The total dollar amount of HELOCs originated in the first quarter was an estimated $95 billion ($95,273,285,650), up 34% from the previous quarter and up 45% from a year ago.

FHA loan share increases annually for fifth consecutive quarter
Among all purchase and refinance loans, 17.5% were FHA loans, 8.3% were VA loans, 0.8% were construction loans, and the remaining 73.4% were other loan types, including conventional.

FHA loans as a share of all loan originations increased 7% from a year ago while the VA loan share were up 5% and construction loans were up 19%. The FHA loan share has increased for five consecutive quarters, and in 10 of the 11 last quarters.

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