Before interest rate hike, mortgages down 11% in Lafayette in fourth quarter | Business

Mortgage lending has fallen in the Lafayette area and may continue as interest rates rise.

The number of loans for a home in the Lafayette area fell 13.5% in the fourth quarter, the second consecutive quarter to decline, according to data released by RealtyTrac and ATTOM Data Solutions.

The decreases follow trends occurring statewide and nationwide. Baton Rouge and New Orleans saw year-over-year declines, while nationwide homebuyer mortgages fell 11% from the third quarter .

Interest rates have risen in recent weeks, based on Freddie Mac. The average 30-year fixed-rate mortgage rebounded to 4.16, topping 4% for the first time in nearly three years.

The Federal Reserve’s recent decision to raise short-term rates and the announcement of further hikes mean that mortgage rates should continue to rise over the course of the year.

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Lafayette’s MSA had 1,167 secured mortgages for residential properties in the fourth quarter, compared to 1,349 in the third quarter and 1,452 in the second quarter, which was the highest since sales soared when interest rates interest fell to historic lows at the start of the pandemic.

The number of secured mortgages for refinance also fell nearly 9.3% to 1,393 in the Lafayette area and remains nearly 20% lower than the previous year’s total. Refinancing skyrocketed to almost 3,000 in the second quarter of 2020 when rates first fell and narrowed to 1,867 in the first quarter of 2021, the data showed.

Overall, lenders issued $1.06 trillion worth of mortgages in the fourth quarter of 2021, the data showed. It was down 9% per quarter and 7% per year. The two declines in dollar loan volume were the largest since the start of 2019.

“The decline in business volume in the residential mortgage industry is now showing across all major loan categories and appears to be more than just a temporary decline,” said Todd Teta, chief product officer at ATTOM. “The downward wave of refinance lending that began in early 2021 has fully spread to home purchase and home equity lending.”

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