U.S. mortgage lending, sliding 5 percent, fell to 16-year low in 2011

TRD New York /
Sep.September 18, 2012 03:30 PM

Mortgage lending in the United States fell to a 16-year low in 2011, amid a struggling recovery and slowing refinancing activity, the Wall Street Journal reported. More specifically, the number of home loans fell 10 percent to a total of 7.1 million. Broken down, mortgages for new homes slid 5 percent, whereas mortgage refinances dropped 13 percent.

According to the Federal Reserve, who provided the data, one reason for this development could be the expiration of tax incentives for first-time home buyers. According to National Association of Realtors figures, the amount of home purchases made by first-time buyers dropped 10 percent to 37 percent last year from roughly 47 percent in 2010, when those tax incentives expired.

As previously reported, mortgage rates could be even lower than the currently low rates. That’s because banks are generating revenue by having borrowers pay a higher interest rate for loans than what they’re paying on the bond market. This has kept rates stuck at 3.55 percent for a 30-year fixed-rate mortgage. [WSJ] — Zachary Kussin

Related Articles

Jerome Powell and New York City construction in October 2019 (Credit: Getty Images)

The Fed lowers rates, and once again real estate is loving it

Housing and Urban Development Secretary Ben Carson (Credit: Getty Images, iStock)

HUD wants to jumpstart bank lending on low-income homes

Lenders issued the most mortgages in 14 years last quarter (Credit: iStock)

Nonbank lenders could give serious boost to cooling housing market

The number of closed sales fell by more than 14 percent year over year in the third quarter (Credit: iStock)

Low mortgage rates are killing Manhattan’s all-cash buyer

Federal Reserve Chairman Jerome Powell (Credit: Getty Images)

Fed cuts rates, signaling caution ahead for real estate investors

Here’s what a Fed rate cut would mean to the US housing market

Here’s what a Fed rate cut would mean to the US housing market

(Credit: iStock)

Despite housing market slowdown, mortgage lenders just had a great second quarter

The Daily Dirt: The dark cloud hanging over buyers

The Daily Dirt: The dark cloud hanging over buyers