US mortgage balances surpass global financial crisis

Friday, August 16, 2019
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Washington: Eli Yosef

NEW YORK (Reuters) – Mortgage balances in the United States rose $ 162 billion in the second quarter to $ 9,406 billion, surpbading the record level of the third quarter of 2008, with $ 9.294 billion, announced Friday. the Federal Reserve Bank of New York. The financial crisis has erupted.
Real estate debt, the largest segment of US household debt, has risen dramatically, with refinancing of $ 130 billion to $ 474 billion in the second quarter of this year, figures that are not adjusted for inflation.
According to a report by Freddie Mac, one of the largest mortgage companies in the United States, mortgage growth in the United States has been long, after falling by about 15% over the peak reached in 2008, reaching its lowest level in the second quarter of 2013, and progressed slowly. Since then.
Household debt is currently different from what it was 11 years ago because lending standards are stricter and less late.
The second quarter of this year was marked by a steep decline in the mortgage rate at age 30, reinforcing the incentive for borrowers to take out a mortgage loan or refinance it. The 30-year average mortgage rate fell to less than 4% in May for the first time since the beginning of last year, resulting in a dramatic decline in mortgage-related debt service.
In contrast, the US housing market has recently collapsed due to a decline in the number of housing units built and rising prices. Housing prices continued to rise from their peak in September 2016 and have continued to rise since then.
In addition to rising home prices, the fact that homeowners are getting cash loans by refinancing their initial mortgage in order to take advantage of their increasing value is an additional factor that contributes to the value of mortgages.
"Refinancing loans accounted for 50% of new mortgages in the second quarter of this year," said INSEAD Mortgage Finance, an industry research group. This represents a small boost in refinancing as the refinancing portion of new mortgages was about 30% in 2018 when rates were rising. & # 39; & # 39;
According to Freddie Mac, borrowers who refinanced their second quarter mortgages in cash drew approximately $ 17.5 billion from the value of their home. That's $ 2.1 billion more than the second quarter of last year.
Sam Khater, Chief Economist at Freddie Mac, said American homeowners were very cautious about the value of their homes.
According to the Freddie Mac report, "Despite the debt burden, Americans are tracking their monthly payments and about 95.6% of payment balances were common, which is above the current level of expansion."

America

United States