BUFFALO, N.Y.—New numbers have been released by one company that offer some insights into mortgage lending during Q4.
LenderLogix has released data as part of its Homebuyer Intelligence Report, a quarterly summary of insights into borrower behavior during the home buying process that is based on data it collects.
Among the findings:
Pre-Approvals
In Q4 2023, LenderLogix said borrowers generated 35,008 pre-approval letters through the company’s QuckQual pre-approval platform, a decrease of 23% from Q3. LenderLogix reported:
- The average number of pre-approved borrowers per loan officer decreased by 15% from 24 in Q3 to 20.4 in Q4.
- The average pre-approval letter loan amount in Q4 decreased slightly by less than 1%, to $294,229, compared to Q3’s average loan amount of $295,312.
- The average sales price also stayed nearly the same, increasing less than 1% from $345,031 in Q3 to $345,351 in Q4.
- The average down payment size shows a slight uptick, moving from 14.5% in Q3 to 14.8% in Q4.
- Conventional loans remained the most popular loan type for pre-approved borrowers, with its share remaining steady at 75%. FHA pre-approvals declined incrementally to 18.5% versus 19% in Q3, as did VA (4%) and USDA share (1%).
Remaining Steady
“Our Q4 findings remain steady in comparison to Q3. With the challenges homebuyers face remaining the same between the two quarters, it’s no surprise,” said LenderLogix Co-Founder and CEO Patrick O’Brien. “As we gear up for the spring market, it's crucial for lenders to remain vigilant in acquiring the tools and resources essential for enhancing affordability in home buying and guiding potential borrowers through the process.”
Borrower Conversion
Of the borrowers using QuickQual in Q4 2023, the company is reporting:
- The average number of days between pre-approval and loan submission decreased to 86.9 days, compared to 89.8 days in Q3.
- The most prolonged duration between pre-approval and application decreased significantly from 1,274 days in Q3 to 612 days in Q4.
- Despite this significant change, the conversion from borrowers using QuickQual to loan application increased slightly from 53% in Q3 to 55% in Q4. Within this subset, borrowers generated an average of 8.45 pre-approval letters before converting.
Off the Sidelines
“With the change in interest rates over the last quarter of 2023, borrowers are stepping off the sidelines,” O’Brien added. “Given the Federal Reserve’s announcement of several interest rate cuts to come in 2024, we can expect this kind of borrower activity to continue to rise.”
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