VA loan activity increases during coronavirus pandemic
The number of Americans applying for mortgage loans by the US Department of Veterans Affairs (VA) detonated during the coronavirus, according to new data from the agency, adding more evidence that real estate has had a unprecedented race for some time.
Data shows that during the third quarter of 2020 – which includes the pandemic-plagued months of April, May and June – the VA issued 331,071 loans. This is an increase from 155,685 over the same period in 2019, meaning the agency’s lending activity has grown by almost 113% year-over-year.
Broken down by generation, the number of VA loans made to millennials jumped more than 95% year-over-year between April and June, and loans to baby boomers increased by more than 120%. Loans to Gen Xers increased by more than 125% over the same period, while loans to Gen Z members increased by almost 178%.
Refinancing loans accounted for a significant part of this growth; According to the new data, the VA saw a 296% year-over-year increase in loans to refinance in the third quarter of fiscal 2020. Millennials were apparently the most interested in refinancing, loans given to members of this company. population increasing by 463 percent year over year.
The main metropolitan areas for VA loan growth during the pandemic were Honolulu, San Diego, Baltimore, Los Angeles, and Washington, DC.
Writing on the results, Chris Birk – the director of education for the AV – wrote last week, “as the coronavirus slowed the process of obtaining a VA loan in some places, the pandemic did little to reduce demand in the weeks and months that followed.”
This finding is consistent with many other observations that real estate has seen significant resilience in recent months, despite an otherwise struggling economy. Among other things, agents have describes extremely active markets, industry the leaders expressed their optimism and bidding wars have become the rule rather than the exception in markets across the country.
In the mortgage market in particular, a report this week from Attom Data Solutions revealed that overall in the United States refinancing reached its highest rate in seven years between April and June.
Caution still needs to be exercised as the coronavirus crisis continues, but at least for now, it’s no wonder Birk has described the VA loan program as “quietly having a banner year.”
Email Jim Dalrymple II