Mortgage credit growth has been booming recently. We’re not really sure what accounts for this as home prices have been pretty steady for a while. The big number is $1.65 trillion in mortgage credit within the month of April. The banks have made mortgage interests very low at around 1.99% because of the Covid pandemic and what we are seeing will have to be analyzed carefully in the upcoming months. Home sales are on hold so these trends are out of the ordinary.
- Outstanding mortgage credit in April was up 0.60% from the previous month and 5.8% versus the same month in 2019.
- It is unusual for mortgage credit growth to accelerate at the same time home sales are flat.
- Balances on many mortgages are increasing due to a lack of payment rather than new borrowing.
“Residential mortgage credit outstanding is pushing higher, and at a very rapid pace.”