Mortgage Borrowing Grows Steadily Again

The consumer confidence in the mortgage and real estate markets has hit its highest point in six years’ time. More and more people take out home loans to finance the purchase of their first house. The delinquency rate is falling and this is another good sign for the economy as well as for the average house buyer.

The number of mortgages used for the purchase of a first home is 2.8% higher for the first three months of 2014 compared to the same period of 2013. This figure may not seem that high especially considering the fact that the interest rates on home loans are still close to their historic low. However, this is the highest increase on an annual basis since the fourth quarter of 2008.

More people are taking out a loan and purchasing a property. This is not just because of the lower interest rates. The stricter rules on lending have made both home buyers and banks more confident about house financing. Many lenders are now lowering their mortgage eligibility criteria and this is also a good sign. With the employment rate increasing and people becoming more confident about keeping their jobs, they are more willing to buy a house.

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Stabilization is the key factor in the mortgage market, especially when it comes to first home loans. The delinquent loans account for 5.56% of the total outstanding balance. In comparison, the corresponding figure for the beginning of 2013 was nearly 28%. This is a huge drop and reveals various positive trends. Both home buyers and lenders are now more responsible. People find it more beneficial to buy a home as the market value of properties is growing. Homes are now more affordable for the average buyer.

The stabilization is expected to continue in the coming years, even though the mortgage rates and house prices are expected to increase considerably.



Christian Calvin mortgage Christian is a contributing writer for He is a graduate from the University of Tennessee with a degree in Communications and a concentration in Broadcasting. Christian has served as vice-president for a privately-held company for more than 20 years. Additionally, he has also applied his writing and business knowledge to various websites with a focus on business and sports news . . . both of which are passions. Christian enjoys playing golf and spending time with his family and friends.


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