Mortgage lending continued to drop considerably in the fourth quarter of 2023, but a recent report indicates that a turnaround is coming.

High home prices, soaring borrowing costs and low housing supply drove lending rates to a two-decade low, with activity down 16.5% from a year earlier and 67.7% from a high point hit in the first quarter of 2021, according to the report by ATTOM. Lenders issued $417.4 billion of residential mortgages in the fourth quarter of 2023, a drop of 14.9% from the third quarter of 2023 and 18.6% from the fourth quarter of 2022.

However, home lending surged nearly 30% in the spring of last year and the rate could increase again this spring if mortgage rates continue to decline as predicted and housing supply improves.

“Multiple powerful forces continued to conspire against the mortgage industry during the fourth quarter, slicing back huge portions of their business,” ATTOM CEO Rob Barber said. “There were signs during the peak buying season of 2022 that things were starting to turn around, with increases in purchase, refinance and HELOC deals. That could happen again this year as we head into this year’s peak period, especially with interest rates coming down recently. 

“But the fourth-quarter numbers revealed continued gloomy times for lenders, no matter how you sliced the pie,” Barber continued.

Homebuyers can find better mortgage rates by shopping around and comparing options. Visiting an online marketplace like Credible can help you compare rates, choose your loan term and get preapproved by multiple lenders at once.


Supply builds as spring nears economists predict that mortgage rates will slide into the 6% territory in 2024. Fannie Mae expects mortgage rates to decline gradually over the next two years, reaching 6.9% for the 30-year mortgage by 2025. At the same time, First American economists noted that mortgage rates will hover in the 6.5% to 7.5% range. 

The dip in rates could help build some much-needed housing supply. Some homeowners are already selling, according to a recent Redfin report. New listings rose 13% from a year earlier nationwide during the four weeks ending March 3, the most significant increase in nearly three years. Home prices have also lost some momentum. Roughly 5.5% of home sellers dropped their asking price, the highest share of any February since at least 2015.  

“There have been two major obstacles for homebuyers over the last year: low inventory and high housing costs,” Redfin Economic Research Lead Chen Zhao said. “Now, the first barrier is starting to come down as more supply comes on the market. Housing costs are still high, but they’re likely to come down a bit as mortgage rates gradually decline through the year and price growth loses some steam. 

“Buyers who can afford today’s mortgage rates may have better luck finding a home now than they have in the past several months, and they also may be less likely to face competition because inventory is improving,” Zhao continued.

If you’re looking to become a homeowner, you could still find the best mortgage rates by shopping around. An online marketplace like Credible can help you compare your options.


Creative avenues for home affordability 

First-time homebuyers are finding ways to forge their path to homeownership. For example, many young Americans planning to buy a home next year are relying on side income to generate cash, according to a Redfin survey. 

Forty-one percent of Gen Zers and 36% of Millennials said they are working second jobs to save for their down payment and about one-quarter plan to use a cash gift from family. Some have even opted to house hack to help pay off their mortgage and other bills, according to a recent report. This is when a buyer purchases a home intending to rent out rooms for the long or short term.  

The co-buying trend is another way young buyers share homeownership costs, according to the report. Co-buying helps friends and family pool resources to come up with down payments and closing costs. It is also a way to share costly monthly mortgage payments, utility bills and maintenance and repair costs.

If you’re considering becoming a homeowner, it could help to shop around to find the best mortgage rate. Visit Credible to compare options from different lenders and choose the one with the best rate for you.


Have a finance-related question, but don’t know who to ask? Email The Credible Money Expert at [email protected] and your question might be answered by Credible in our Money Expert column.

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