Americans borrowed a record $ 1.61 trillion to buy homes in 2021

Mortgage lenders issued $ 1.61 trillion in purchase loans in 2021, up from $ 1.48 trillion in loans issued in 2020 and marking the highest number of mortgages on record.

The figures for 2021 broke a previous record set in 2005, when $ 1.51 trillion in loans was issued, according to The Wall Street Journal.

The record numbers reflect a hot housing market. At the onset of the pandemic, people were drawn into the market with low interest rates and the desire for more space in their homes – desires that continue to drive up house prices, noted the Newspaper.

House prices rose 18.4 percent in October, marking a slight decline from the 19.1 percent home price hike in September.

But with a strong job market, Americans who got pay raises or saved up during the pandemic are potentially ready to enter the housing market despite soaring costs.

The Bureau of Labor Statistics reported that wages for all workers in the private sector rose 4.6% year-over-year in the third quarter, the Journal noted.

“All of that extra income is going somewhere, and a lot of it has been spent on housing,” Taylor Marr, deputy chief economist at Redfin Corp., a real estate brokerage firm, told the newspaper.

About William Moorhead

Check Also

Taxpayers left with a £421m bill after one in 12 businesses defaulted on Covid loans | Company

Taxpayers have had to foot a £421million bill to cover embittered Covid debts, after one …