Purchase loans experienced a 52% seasonal increase on a quarterly basis during the second quarter, reaching the highest level both in terms of volume and dollar amount since 2007, according to Black Knight Financial Services.
During the second quarter, Black Knight measured $297 billion in purchase originations, representing 57% of all first-lien lending for the quarter, Black Knight executive vice president Ben Graboske said in a news release Tuesday tied to its monthly Mortgage Monitor report. Overall, purchase originations increased by $102 million from the first quarter.
"Although the purchase lending credit box remains tight, there is increasing participation among 'moderate' credit borrowers as well," Graboske said. "Two-thirds of second quarter purchase loans went to borrowers with credit scores of 740 or higher – on par with what we saw during the same period last year – but there was a 13% year-over-year increase in lending to borrowers with credit scores between 700 and 739."
The highest rate of growth of any segment for the past three quarters has been among moderate credit borrowers, and they now represent 19% of all purchase originations.
Overall, first-lien mortgage originations reached $518 billion in the second quarter, the highest volume since the second quarter of 2013. The jump in purchase originations made up for a slowdown in refinance originations, which rose only 8% from the first quarter and fell year over year.
