WASHINGTON, Tue Sep 18, 2012 – The volume of home lending dropped 10 percent last year to the lowest level since 1995, highlighting the government’s uphill battle to prop up the still-struggling housing sector.
The Federal Financial Institutions Examination Council, a group of U.S. regulators, published data on Tuesday showing 7.1 million home loans were made in 2011, down from 7.9 million the previous year.
The data, which includes mortgages, refinancing and home improvement loans, showed that loans to purchase a home, as well as refinancings, fell.
Refinancing of home loans dropped 13 percent during the year, while new mortgages dropped 5 percent, FFIEC said in a statement.
However, the Federal Reserve, one of the regulators involved in collecting the data, noted that refinancing activity surged late in the year as interest rates fell.
The Fed’s analysis highlighted the government’s struggle to prop up the still-depressed housing market, which has held back the economy’s recovery from the 2007-2009 recession.