By Nick Timiraos and Sarah Portlock
The Wall Street Journal
Mortgage lending declined to its lowest level in 16 years in 2011 amid weak demand for mortgages and tighter lending standards, according to a report released by federal regulators Tuesday.
Banks funded about 7.1 million mortgages in 2011, down 10% from the year before, and the lowest tally since banks issued 6.2 million mortgages in 1995. The Federal Reserve analyzed data submitted by more than 7,600 lenders under the Home Mortgage Disclosure Act.
Loans funding home purchases fell by 5% last year and stood 64% below the level of 2006, when the housing market reached its peak. Refinances, which are more sensitive to modest swings in interest rates, fell by 13% in 2011 from 2010 but rebounded at the end of the year, after the average 30-year fixed-rate mortgage dropped below 4%.
The report showed that home-purchase lending activity fell more substantially in areas that have borne the brunt of foreclosures and home-price declines, a sign of how difficult it will be for some markets to heal.
More porches and fewer garages on new homes/USA TODAY
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