Lending Frenzy: More money was borrowed to buy California property last quarter than during any three-month period in the past four years, a real estate information service reports.
Lending institutions made $18 billion in purchase loans from April through June. That was up 34.7% from $13.4 billion in loans made during the first three months this year and up 23.8% from last year’s second-quarter total of $14.6 billion, according to Dataquick Information Systems in La Jolla.
Buyers are flocking to adjustable-rate mortgages in record numbers, Dataquick said. In June, for example, 64.3% of purchase loans were ARMs, compared to only 46% for June, 1993.
“There’s a lot of scrambling going on in the lending industry these days. Lending institutions are all fine-tuning their product lines for the purchase market now that the refinance wave has receded,” said Donald L. Cohn, chief executive officer of Dataquick.
While purchase loans increased, the amount of refinances was down 51.1% to $15.6 billion compared to the previous three months, when that total came to $32 billion. For the second quarter last year, refinances totaled $44.5 billion