Overall home lending in the second quarter fell from a year agoas the tide continued to ebb on refinancing, according a reportreleased Thursday by ATTOM Data Solutions.

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The Irvine, Calif., company's latest quarterly report showed 1.9million loans were originated on U.S. residences in the secondquarter, 4% fewer than in 2015's second quarter.

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Purchase originations increased 1% from a year ago — the eighthconsecutive quarter with an annual increase — and home equity lineof credit (HELOC)originations rose 5% — the 17th consecutive quarter with an annualincrease.

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“The clear winners are homeowners who have built up a lot ofequity, and they're leveraging it in greater numbers,” said DarenBlomquist, senior vice president at RealtyTrac, a subsidiary ofATTOM Data Solutions.

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Refinance loans were down 12% in the second quarter comparedwith a year ago, which followed a first-quarter decline.

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The big boom in refinance loans was 2012-2013 with a mini-boomin 2015. Since then a decline has been expected, Blomquist said.Even though the interest rates have remained low, the pool ofhomeowners who can benefit from a refinance is becoming ever moreshallow. “There's only so much of a market there.”

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“Low interest rates as a stimulus are losing theireffectiveness,” he said.

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The picture is blurrier on purchase loans, Blomquist said.Softer metro areas in the Midwest showed improvement, while marketsthat have been strong and are known for high prices tended to fall.Areas with purchase loan declines included Honolulu, Denver, SanFrancisco, Dallas, Portland, Ore. and San Jose, Calif.

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“They've become a victim of their own success: The higher pricesare pricing some people out of the market,” he said.

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But many of those markets were also heavy contributors to thegains in home equity loans. In some cases, realtors are reportingthat home owners are using the proceeds to make strong cash offerson their next home. “If you're a seller and a buyer, you might haveto leverage that strength as a seller to be a buyer.”

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Jim DuPlessis

A journalist for decades.