Home Sales Rise as Mortgage Lending Declines in 2011

Even though purchase contracts may be on the rise for many Atlanta new home builders, this doesn’t reflect the overall picture in the mortgage market. Despite increased buying activity, new regulations, low appraisals and lack of equity have kept mortgage lending on the decline.

According a recent report from federal regulators published in the Wall Street Journal, mortgage lending declined to its lowest level in 16 years during 2011 due to tighter lending standards and decreased mortgage demand. Only 7.1 million mortgages were funded by banks in 2011, a 10 percent decrease from the year before and the lowest total since 1995 when banks issued only 6.2 million mortgages. These numbers were based on data submitted from more than 7,600 lenders under the Home Mortgage Disclosure Act.

The amount of loans funding home purchases fell by 5 percent last year and remained 64 percent below the 2006 housing peak. Refinances, which are especially sensitive to interest rate swings, fell by 13 percent from the previous year, but did make a comeback towards the year’s end after the average mortgage rate dropped below 4 percent. Additionally, the top 10 largest lenders for 2011, which accounted for one-third of all mortgages, saw lending for home purchases fall by 17 percent.

What does this all mean? Academy Mortgage predicts to see fewer loan originators moving forward as more changes from the Consumer Financial Protection Bureau fall into place within the next six months.

However, Academy Mortgage is still determined to help Atlanta new home buyers get into their dream home. If you’re looking to purchase a new home in the metro area, contact us at 404-574-2600 or visit the Academy Mortgage website.

Equal Housing Lender. (c)2012 Academy Mortgage License #3113. GA Lic. # 20505. This is not a commitment to lend. Academy Mortgage Atlanta: 5565 Glenridge Connector,  Suite 400. Atlanta, GA 30342. Georgia Residential Mortgage Licensee.