American homeowners are taking out mortgages at a near record rate.
Banks issued $2.8 trillion in mortgage debt in the first nine months of the year, the Wall Street Journal reported, citing data from Inside Mortgage Finance.
With low interest rates leading homeowners to refinance, experts predict that originations could exceed $3.7 trillion — the prior record set in 2003 — by the end of the year.
“2003 was a record that nobody thought would ever be achieved again,” said Guy Cecala, Inside Mortgage Finance’s chief executive.
The trend is mainly coming from refinancing activity, which allows buyers to get lower rates on their mortgages.
Refinanced mortgages made up 65 percent of all originations in the first three quarters of 2020, according to the Journal.
According to the Mortgage Bankers Association’s most recent report, home loan applications dropped in the first week of December after several weeks of steady gains. The average size of purchase loan applications also fell to $366,100 from a record high of $375,200 the prior week. [WSJ] — Sylvia Varnham O’Regan