Refinance mortgage volume hit a 10-year low during the first quarter, while a tepid market for purchase lending put total origination activity at its lowest level since 2014.
There was $348 billion of mortgages and home equity lines of credit originated during the quarter, 21% lower than the same period in 2016, according to Attom Data Solutions.
"Rising mortgage rates made qualifying for a home purchase more difficult and refinancing an existing home loan less attractive in the first quarter," Daren Blomquist, Attom's senior vice president, said in a press release.
Refinance lending totaled $168 billion in the first quarter, down 39% from the previous quarter and down 26% from a year ago to the lowest level since the first quarter of 2006, when Attom, the parent company of RealtyTrac and other real estate data products, started collecting data.
"Refinance originations in particular fell off a cliff in the first quarter to the lowest level in more than 10 years after posting double-digit percentage increases in the third and fourth quarters of 2016, indicating that some refinance demand was pulled forward late last year in anticipation of rising interest rates."
Purchase volume was $136.6 billion, down 27% from the fourth quarter and 14% from the first quarter of 2016.
But there were also signs that first-time buyer activity increased during the quarter. "The share of FHA buyers increased from the previous quarter after two consecutive quarters down, and the median down payment decreased following three consecutive quarters of increases," Blomquist said.
Federal Housing Administration-insured mortgages were 13.3% of all loans originated in the first quarter, compared with 12.4% in the fourth quarter and 13.8% in the first quarter of 2016.
"However, the data also indicates more homebuyers needed help to qualify for a home purchase in the first quarter. Nearly 22% of all single-family purchase originations had multiple, non-married co-borrowers on the loan, up from 20% a year ago," said Blomquist.
There was a total of $43.4 billion of home equity lines of credit originated during the quarter, down 14% from the fourth quarter and 18% from one year ago.