The year 2019 was the best year for mortgages since the crisis in 2006, the Wall Street Journal reported. The lending boom amounted to $2.4 trillion in home loans, an increase of 46 percent since 2018, according to industry research group Inside Mortgage Finance. The trend is expected to continue this year.
According to the Mortgage Bankers Association, refinancings made up nearly 40 percent of mortgage originations in 2019.
Lending, fueled by cuts in interest rates, led to a boost in housing prices and home sales, all of which meant a boost for the economy overall. At the end of 2019, the average rate on a 30-year fixed-rate mortgage fell to 3.74 percent, compared to 4.55 percent at the same time last year.
Despite the overall improvement in the market, buyers face several barriers. A low supply of housing, and the fact that home prices are rising more quickly than incomes, continue to make it difficult for many Americans to buy. This is especially true for people seeking to buy their first homes, because lower rates can lead to higher prices, given that some buyers might be able to pay more in bidding wars.