BUFFALO, N.Y.–The effects of rising rates on the number of mortgage applications being filed can be seen in new data released by one company.
LenderLogix, which provides mortgage point-of-sale and automation software, said its latest quarterly Homebuyer Intelligence Report, which is based on data collected by lenders that use its solutions, found that during the third quarter borrowers generated 45,527 pre-approval letters, a decrease of nearly 23% from Q2.
The average of pre-approved borrowers per loan officer decreased by 11.6% from 28 in Q2 to just over 24 in Q3, the company said.
Additional Findings
Other findings in its latest survey include:
- The average pre-approval letter loan amount in Q3 also decreased slightly by 2.5% to $295,312 compared to Q2’s average loan amount of $302,836.
- The average sales price stayed nearly the same, decreasing less than 1% from $348,348 in Q2 to $345,031 in Q3, with an average down payment size of 14.5%.
- Conventional loans remained the most popular loan type for pre-approved borrowers, with its share slightly rising to 75% versus 71% in Q2. FHA pre-approvals slightly declined to 19% versus 22% in Q2, as did VA (4%) and USDA share (1%).
- Of the borrowers using the company’s QuickQual in Q3 2023, the average number of days between pre-approval and loan submission increased incrementally to 89.8 days, compared to 89.3 days in Q2.
- The most prolonged duration between pre-approval and application also increased to 1,274 days in Q3 from 994 days in Q2. “While the increased length between pre-approval and loan submission did not dissuade borrowers in Q2, the same cannot be said for Q3, as conversions from borrowers using QuickQual declined from 58% in Q2 to 53% in Q3. Within this subset, borrowers generated an average of 8.57 pre-approval letters before converting,” LenderLogix said.
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