BUFFALO, N.Y.— During the second quarter borrowers generated 58,927 pre-approval letters through the QuickQual pre-approval platform, an increase of nearly 11% over Q1. But while the average number of borrower logins to QuickQual declined from 12 times in Q1 to 8 times in Q2, loan officers increased their number of pre-approved borrowers by 16% over the period to 28, up from 24 in Q2, according to the provider of that platform, LenderLogix.
The numbers were released as part of the company’s quarterly Homebuyer Intelligence Report.
Increases Seen
According to LenderLogix, the average pre-approval letter loan amount in Q2 increased by 4% to $302,836 compared to Q1’s average loan amount of $292,491. Additionally, the average sales price increased 5% from $334,022 in Q1 to $348,348 in Q2, resulting in an average down payment of roughly 13% versus 12.4% in Q1, the company said.
LenderLlgix further reported conventional loans were again the most popular loan type for pre-approved borrowers, with its share remaining virtually unchanged at 71% versus 72% in Q1. Similarly, FHA pre-approval share remained steady at 22% versus 21% in Q1, as did VA (5%) and USDA share (1%), the company said.
‘Excellent Sign for Lenders’
“Increases in both pre-approval letters generated and average number of pre-approved borrowers per loan officer signal slight improvements in the homebuying market, which is an excellent sign for lenders struggling under recent market conditions,” said LenderLogix Co-Founder and CEO Patrick O’Brien in a statement. “However, the rise in average sales price, loan amount and down payment indicate that it’s only getting more expensive for borrowers to buy so lenders will need to equip themselves with the tools and resources necessary to make homebuying more affordable.”
Additional Data
LenderLogix further reported:
- Of the borrowers using QuickQual in Q2 2023, the average number of days between pre-approval and loan submission increased to 89.3 days, compared to 71 days in Q1.
- The most prolonged duration between pre-approval and application also increased from 622 days in Q1 to 994 days in Q2. T
- The increased length between pre-approval and loan submission did not dissuade borrowers, as conversions from borrowers using QuickQual rose from 56% in Q1 to 58% in Q2, with those borrowers generating an average of nine pre-approval letters before converting.
A Main Driver
“Lack of inventory is certainly one of the main drivers behind the increase in time between when borrowers get pre-approved and when they submit a loan application, which only compounds the challenges facing today’s buyers,” O’Brien stated. “However, for the loan officers that remain diligent in their outreach to prospects and agents, that effort seemingly pays off. Thus, loan officers should adjust their expectations around the length of today’s home search and increase communication during this time to optimize their conversion rate.”
Additional info can be found at www.lenderlogix.com.
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