SoFla loan originations see year-end decline
Loans to finance home purchases were hit hardest
February 18, 2016 12:45PM
A 2009 photo of Miami’s skyline (Credit: Nigel Morris)
As another possible sign that South Florida’s residential market is slowing, property loan originations declined considerably at the end of 2015.
Property owners signed off on 35,271 loans during the final three months of 2015. That includes financing for buying a residential property, refinancing an existing loan or home equity lines of credit.
Though it equates to 9 percent more loans than in the last quarter of 2014, the number of loans also fell by 9 percent between the third and fourth quarters of 2015.
A large part of that decline is thanks to a drop in purchase loans: 14,880 mortgages were taken out in the fourth quarter to pay for a property purchase, falling by 3,060 loans compared to the previous month. Meanwhile, refinancing loans and home equity lines of credit held mostly steady.
Recent reports have shown the number of home sales in South Florida have also fallen off in recent months. Much of that is due to fewer distressed sales — though they’re typically paid for without financing.
Nationally, the trend was similar. U.S. property owners took out 1,552,329 home loans during the fourth quarter, a 14 percent decrease from the months of June, July and August.
“New mortgage rules implemented at the beginning of October likely contributed to the decrease, but weakness in some local economies could also be contributing to the decrease, most notably in oil producing markets such as Houston and Oklahoma City, both of which saw purchase originations decrease by double-digit percentages both quarterly and annually,” RealtyTrac Vice President Daren Blomquist wrote in the report. — Sean Stewart-Muniz
Source: The Real Deal