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Mortgage lending plummets to lowest level in 13 years
With rising interest rates, fewer homeowners are refinancing
Mortgage lending fell to its lowest level in 13 years for the year ending in September.
In addition, 2014 will likely be the weakest year for new home loans since 2000, according to numbers from the Federal Reserve Bank of New York cited by the Wall Street Journal. The amount of mortgage lending per quarter averaged $357 billion a quarter, the lowest since 2001, according to the newspaper.
Mortgage lending collapsed after the housing bubble bust in 2007 but was boosted by several rounds of stimulus from the Federal Reserve. The Fed’s intervention led to lower interest rates and in turn spurred refinancing, according to the newspaper.
But the rate on fixed-rate 30-year mortgages hit 4.6 percent in June of last year, up from 3.6 percent in May. Since the spike, refinancing has fallen off. [WSJ, 1st] — Claire Moses