---
title: Originations Trends, Will They Continue to Decline?
description: Join the First American network of trusted title agents with comprehensive tools and resources.
image: https://cdn2.hubspot.net/hubfs/1882785/Origination%20trends-856110-edited.jpg
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# Originations Trends, Will They Continue to Decline?
Jun 29, 2017
Topics: [Customer Service](https://blog.docutech.com/tag/customer-service)
Recently published data reflects declining originations, however; is a different story beginning to emerge? For example, [the *Monitor Report* recently published by Black Knight Financial Services](https://www.housingwire.com/articles/40328-mortgage-originations-plummet-34-in-first-quarter-2017), showed that overall mortgage originations took a dive by nearly 35 percent in the first quarter of 2017. The report also disclosed other statistics of potential concern, including the fact that refinance originations dropped by 45 percent (a 20 percent drop from last year) and the amount in first-lien mortgages originated decreased by 9 percent to settle at the lowest point since the end of 2014.
While At first glance, this data paints a bleak picture of the present state of housing, let’s look at some positive trends.
**Economic Prosperity**
When unpacking the data included in the Black Knight report, it actually demonstrates that the mortgage industry — not to mention consumers’ overall financial wellbeing — is healthy.
Overall origination volume may be low compared to last year, but purchase origination volume in Q1 2017 actually increased by 21 percent from the fourth quarter of 2016 and by 3 percent from last year overall. To put it simply: more Americans were purchasing homes at the beginning of this year than they were at the same point a year ago or last year as a whole.
While this is the lowest annual growth rate that the industry has seen in nearly four years, it can be attributed to a potentially promising culprit: a sudden spike in interest rates. Luckily, this is a temporary development, as interest rates are ever-fluctuating to reflect the cyclical nature of the housing industry. Furthermore, since they’re often adjusted to prevent inflation, rising interest rates indicate a growing economy, another potential harbinger of more home purchases.
**Dropping Refis**
While purchase originations increased, refinance originations declined significantly. This drop may actually be a positive one, as it suggests that a majority of Americans are in a better place financially than they’ve been in recent years and may have less of a need to refinance their mortgages to accommodate decreases in income. This assumption is further bolstered by the fact that the drop was led by borrowers who had high credit scores — one of the biggest indicators of good fiscal health — and [the rate of unemployed Americans is currently at the lowest it’s been in over a decade](https://newslink.mba.org/mba-newslinks/2017/june/mba-newslink-wednesday-6-7-17/u-s-job-openings-hit-new-high/).
**Government Support**
[President Trump recently proclaimed June as National Homeownership Month](http://www.themreport.com/daily-dose/06-01-2017/carson-kicks-off-homeownership-month-forum), expressing that the federal government will be placing a renewed focus on homeownership. “This month, we recommit to ensuring that hard-working Americans enjoy a fair chance of becoming homeowners,” he said during the announcement.
In conjunction with the proclamation, Ben Carson, the head of the Department of Housing and Urban Development, held an academic forum at the department to educate the general public about the present state of housing, the remnants of last decade’s housing crisis and current barriers to homeownership. Carson will continue talking to the rest of Capitol Hill and the greater media to raise more awareness around homeownership.
Hopefully the federal government’s rededication to accessible and sustainable homeownership will introduce more initiatives that only further this aim and help the housing industry continue to thrive. Furthermore, with greater public knowledge around the path to homeownership, the hope is that more potential homebuyers will feel confident enough to initiate their own purchases.
—
While data can reveal valuable insights, it’s also important to see the full picture to understand how to effectively manage your processes for the future.
As lenders adjust to ever changing dynamics, the focus tightens on achieving streamlined processes and optimizing the borrower experience. Future success is dependent upon reducing costs, increasing efficiency and accuracy, and delivering a truly delightful experience today and tomorrow.
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