Near-record low mortgage rates are boosting mortgage activity, prompting buyers and refinancers to jump into the market. The number of new mortgages originated in the last three months of 2019 topped all quarters since the fourth quarter of 2005, according to new data from the Federal Reserve Bank of New York.
More than $750 billion in new mortgages originated in the fourth quarter of 2019. That marks a pivotal reversal from the first quarter of 2019, when there were $344 billion in mortgage originations.
“Mortgage originations, including refinances, increased significantly in the final quarter of 2019,” says Wilbert Van Der Klaauw, senior vice president at the New York Fed. Indeed, a lot of the uptick in originations was fueled by a high number of mortgage refinancers taking advantage of lower mortgage rates.
In total, mortgage origination volume topped about $2.1 trillion in 2019.
Despite the increase in originations, credit standards did tighten slightly in the fourth quarter, according to the Fed’s report. The median credit score of borrowers applying for a mortgage rose to 770 in the fourth quarter, a five-point increase over the previous quarter. The Fed suggested the increase was due to the increase in the number of refinancers.