Bigger and FHA loan growth lagged further behind GSE mortgages

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The latest TransUnion quarterly report notes that the gap between the growth rate of government-funded mortgage loans and other types of loans has widened over the past year.

The change in the number of loans purchased by Fannie Mae and Freddie Mac was almost in line with the level of the previous year at 110%, while mortgages insured by the Federal Housing Administration grew by 22% and large products grew by 28%, according to the data. for the first quarter of 2005. Latest TransUnion report. Comparable growth rate compared to the same period last year in the first quarter of last year was 114% for GSE loans; jumbo – 50% and FHA – 42%.

Refinancing, high housing prices, concentration difficulties associated with the pandemic on state-insured loansand the tendency of borrowers to refinance into cheaper GSE products likely played a role in increasing the mismatch for FHA products.

“The rise in home prices has also made entry-level homes out of reach for several new buyers who also tend to rely on FHA loans,” Matt Komos, vice president of research and consulting at TransUnion, said in an email. He noted that in the first quarter, the refinancing rate was 64% for Fannie and Freddie loans, compared to 43% for FHA loans.

Meanwhile, lingering impacts market failure This affected the giant market last year and will likely slow its growth at least in the first quarter of 2021.

“Several key major lenders … put their … programs on pause when the headwind of the pandemic began to feel. Lending volumes have increased, but far from the level that existed before the pandemic, ”Komos said.

While the TransUnion report did show some differences in growth rates, it generally showed that the larger consumer lending market as a whole has largely recovered from any credit contraction during the pandemic.

TransUnion’s credit industry indicator rose to 128 in the second quarter, up from 87 in the same period a year ago. (Mortgage figures were a quarter behind the TransUnion report.)

While government intervention helped mortgages recover fairly quickly from market disruptions at the start of the pandemic, sectors such as credit cards and car loans have seen a slower recovery, the TransUnion study found.



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