Home lending in 2011 reached its lowest level since 1995, according to a new report. The low number of new loans solidifies why so many home buyers in recent years have reported they’re struggling to qualify for a mortgage: It’s because lenders aren’t lending like they used to.
Home lending last year dropped 10 percent with 7.1 million home loans issued in 2011, down from 7.9 million in 2010, according to the Federal Financial Institutions Examination Council. The data reflects lending for mortgages, refinancing, and home improvement loans.
Despite record low mortgage rates, new mortgages fell 5 percent last year while loans for refinancing dropped 13 percent, according to FFIEC.
In the aftermath of the housing crisis, banks have tightened their underwriting standards and are now requiring higher credit scores to qualify for loans, the FFIEC says.
What’s more, the report found disparity in who is qualifying for loans too. Mortgage applications submitted by African Americans and Hispanics were more likely to be rejected than applications from non-Hispanic whites, the study found.
Source: “U.S. Home Lending Hit 16-Year Low in 2011,” Reuters