As rates have gyrated over the past 1-3 years, mortgagees have ramped up refinancing more often.
A significant contributor to the financial crisis of 2008 was the onslaught of lower quality mortgages, or otherwise known as sub-prime loans, which were “packaged” and sold as complicated products deemed as high quality.
The dramatic drop in mortgage debt from its height in the second quarter of 2008, to its low in the 1st quarter of 2013, was a drop of over 10.5%. Data collected by the Fed since 1951 has never seen such an elimination of mortgage debt of this magnitude.
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The growth of the mortgage market has been compromised ever since the financial debacle of 2008, when new lending regulations limited loans. Growth in mortgages actually didn’t start again until the second quarter of 2013.
Economists see an improving housing market as a result of an improving job environment and stronger household finances. Such dynamics lend themselves well to the overall health of the economy.
Source: Federal Reserve