Skip to content
Link copied to clipboard
Link copied to clipboard

Home mortgage lending fell to the lowest level in two decades in early 2023

Mortgage originations in the Philadelphia metro area were down about 62% in the first quarter of 2023 compared to the same time last year. That's a bigger drop than nationally.

Nationwide, residential mortgage lending in the first quarter of 2023 was down 70% from a peak two years earlier and reached its lowest level in more than two decades, according to real estate data provider ATTOM.
Nationwide, residential mortgage lending in the first quarter of 2023 was down 70% from a peak two years earlier and reached its lowest level in more than two decades, according to real estate data provider ATTOM.Read moreStaff illustration / Getty Images

At the start of this year, residential mortgage lending nationwide fell to the lowest level in more than 20 years, according to ATTOM, a property data provider.

In the first three months of 2023, 1.25 million mortgages were made for residential properties of one to four units across the country. That’s the lowest number since late 2000.

These mortgage originations were down 70% from the peak in the first quarter of 2021 — when the housing market was red hot, deep in the pandemic — and down 56% from the first quarter of 2022, according to ATTOM. Mortgage originations (loans that lenders create) include both purchase and refinance home loans.

Mortgage interest rates that doubled last year, high consumer price inflation, a low supply of homes for sale, and overall economic uncertainty have contributed to stalling the country’s decade-long housing market boom and led to drops in residential lending, according to ATTOM.

The first quarter of this year also was the eighth straight quarter of declining mortgage originations.

Winter is typically a slow time for home buying, “but the latest slide extends a run that started two years ago and has carved away nearly three-quarters of the home-mortgage business,” Rob Barber, chief executive officer at ATTOM, said in a statement.

This year’s spring home-buying season — typically the busiest time of year — “will be a key indicator of whether things may turn around,” Barber said.

Lending in the Philadelphia metropolitan area dropped more than it did nationally from the first quarter of 2022 to the same period this year. New loans were down about 62%, according to ATTOM.

Residential lending peaked in the region in spring 2004, when almost 119,000 mortgages were created. Originations in the first quarter of 2023 were down 75% from that peak.

Purchase loans in the area peaked in summer 2021.

Total originations bottomed out at almost 24,000 in the first quarter of 2000. They were up 23% from that level in the first quarter of this year.