Residential Lending Slows Even As Market Share Rises

The industry closed out the first quarter with a higher percentage of the total mortgage market, although originations dropped amid decreasing inventories and a broader slowdown in home loan activity.

 
 

TOTAL REAL ESTATE ORIGINATIONS AND MARKET SHARE*

FOR U.S. CREDIT UNIONS | DATA AS OF 03.31.22
© CALLAHAN & ASSOCIATES | CREDITUNIONS.COM
 

Residential mortgage originations in the United States slowed in the beginning of this year, contracting from $893 billion in the fourth quarter of 2021 to $689 billion in the first quarter of 2022, according to the Mortgage Bankers Association. Originations peaked at $1.3 trillion in the fourth quarter of 2020 and have decreased every quarter since then.

For credit unions, a cooling residential market didn’t stop them from increasing their origination market share, which increased 1.7 percentage points to 8.5%.

A surge in demand the past two years has diminished housing inventory in the United States. According to Realtor.com, there were fewer than 400,000 homes for sale at the end of the quarter, down from the more than 1 million norm for this time of year. Rising mortgage rates have already impacted refinances, and tempered demand from continued rate increases is unlikely to cause the housing market to reach equilibrium, as buyers still far outnumber available homes.

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* Market share is calculated as a percentage of residential first mortgage originations. Total real estate values include other real estate types, such as commercial and HELOCs, which are not included in the market share calculation.