NEW YORK–The second quarter of 2020 was the mortgage market’s best quarter in years, despite the economic slowdown, according to newly released data.
According to mortgage data firm Black Rock, lenders issued $1.1 trillion in home loans between April and June, the biggest quarter in the company’s records, which date to 2000. Lenders extended roughly $2.5 trillion in home loans in all of 2019.
Refinancings, up more than 200% from a year ago, drove the increase, the Wall Street Journal reported, driven in large part by rates that have continued to decline, falling below 3% for the first time in July. Purchase mortgages, though, fell 8% from a year earlier, the data show.
“The mortgage market’s response to the pandemic is the latest in a series of seemingly opposing indicators of Americans’ financial health,” reported the Journal. “Many renters are worried about getting evicted after losing jobs or taking pay cuts. Many out-of-work homeowners are staying afloat for now—but only because lenders are letting them temporarily skip mortgage payments.
“Meanwhile, many wealthier Americans with steady jobs, stuck at home with fewer places to spend money, are faring well,” the Journal continued. “The pandemic and record-low rates have nudged many of them to buy second homes in more-rural areas or to shop for houses with more space.”
Overall Sales Up
Overall, home sales were up nearly 25% during July, the strongest monthly gain on record, according to Black Rock.
The Journal noted the mortgage market “had been on a tear before the pandemic. Originations last year reached their highest level since 2006,” according to industry research group Inside Mortgage Finance.
As credit unions are aware, many mortgage lenders have been hit with a deluge of refinance and purchase applications from those with the means to take advantage of low rates, the Journal noted.