One of the trendiest loan products during last year's up-and-down market is seeing fading interest.
Home equity line of credit volume fell 16.2% in the final three months of 2022 compared to the third quarter of last year, according to Attom. The 313,973 HELOCs in the fourth quarter however still accounted for a hearty $60.1 billion in volume and made up 20.7% of all loans to close the year.
"The direction of interest rates this year will dictate whether HELOC activity stays high as a portion of overall activity or households return to cash-out refinancing deals to help pay for big-ticket expenses," said Rob Barber, chief executive officer at Attom, in a press release Thursday.
Mortgage rates peaked at 7.08% in early November, according to Freddie Mac, and since fell, although as of last week they
The products
Muted fourth quarter HELOC demand was still 31.8% greater than the same time in 2021, when borrowers took out 238,164 loans for $47.2 billion of volume. The recent end-of-year dip followed HELOC growth in five of the previous six quarters, Attom said, including $72.3 billion in HELOC volume between last July and September from 374,703 loans.
Some of the country's
The HELOC slide mirrored a 24% decline in total mortgage volume quarter-to-quarter, Attom said, with 1.52 million originations for residential properties between 1 to 4 units at the end of the year. That was the seventh consecutive quarterly decrease in overall origination volume, down 56% compared to the fourth quarter of 2021 and the lowest figure since the beginning of 2014.
Purchase originations of 708,739 mortgages in the fourth quarter fell 26.1% from the prior three months, with a dollar figure dropping 28.4% to $257.5 billion. Home buying declined in 98% of the 191 metropolitan areas analyzed by Attom, rising in just three Florida cities: Ocala (up 12.7%); Port St. Lucie (3.2%); and Naples (0.4%).
Meanwhile, refinance activity of 496,221 loans fell 26.7% from the third quarter and hit its lowest count since the first quarter of 2000, Attom said. That volume fell to $157.9 billion from $217 billion the quarter prior. Compared to the end of 2021, refis were down 73.4%, findings in line with
Refinance activity ticked up in just five metros east of the Mississippi River: Peoria, Illinois; Binghamton, New York; Dayton, Ohio; Ann Arbor, Michigan and Atlantic City, New Jersey.