Mortgage lending in the US continued to fall in 2011, down to its lowest recorded level in 16 years, according to the NASDAQ.
The number of home loans granted last year dipped 10 percent to 7.1 million, the lowest figure reported under the Home Mortgage Disclosure Act since 1995.
Despite a pick-up in mortgage activity in late-2011 and the average rate for 30-year loans declining to about four percent, home purchase mortgages fell around five percent while refinancing dropped 13 percent.
According to the Federal Reserve which gathered the data along with other regulators, the 16-year low last year was attributed to the expiration of tax incentives for first-time home buyers in April 2010.
“The first-time home buyer tax credit programme likely stimulated home buying in the first half of 2010 as individuals sought to purchase their homes before the sunset date,” said the Federal Reserve, citing data from the National Association of Realtors.
This data revealed that the percentage of home purchases by first-time buyers decreased to 37 percent in 2011 from around 47 percent the previous year, with highly distressed neighbourhoods being the most affected.
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