Mortgage Lenders Provided a Record $1.61 Trillion in 2021

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by Martin Armstrong

The post-pandemic real estate frenzy led to mortgage lenders issuing more money last year than ever before. According to records, mortgage lenders in the US issued $1.6 trillion in purchase loans in 2021, an increase from $1.48 trillion in 2020. The only time mortgage loans came close to this level was in 2005, when lenders issued $1.51 trillion in loans.

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Refinances declined to $2.3 trillion in 2021 from $2.6 trillion in 2020. Total originations also fell from their 2020 peak of $4.1 trillion to $3.9 trillion, with many homeowners already taking advantage of low rates. The markets are anticipating three rate hikes from the Federal Reserve this year, which would cause an increase in mortgage rates.

Mortgages are low, but home prices are at an all-time high as demand has not waned. The Federal Reserve Bank of Atlanta notes that mortgages are now less affordable relative to income than any period since 2008 during the subprime mortgage crisis. Home prices typically stay in line with inflation, but the 18.4% annual increase in average home prices recorded this past October shows that the market is indeed inflated.

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