The housing market in 2021 was one for the record books.
With prices at historic highs and the number of listings in a deep hole, open houses looked like Black Friday sales and many would-be buyers were elbowed out of the melee.
Higher home prices=bigger loans People are also reading… Mortgages for single-family homes averaged $343,000 in 2021. That's a 15% increase from the 2020 average. The jump is particularly notable when you consider these mortgages rose just 8% from 2019 to 2020, a one-year increase that includes the beginning of home prices' precipitous climb.
Approved, denied: Have outcomes changed?In 2021, lenders processed some 7.1 million mortgage applications, up 8% or about a half million from the year before. Among those, 73% resulted in loan originations and 7% resulted in denials. The remainder were closed for incompleteness or approved but not originated.
Advice for buyers: Buyers faced with denials for debt-to-income ratio or credit history have their marching orders: When lending standards are high, entering the market with less debt and a robust credit history increases your chances for approval. A denial based on collateral isn’t quite as straightforward, but there are options.
Conventional mortgages typically have the strictest standards for approval, while government-backed loans like FHA and USDA loans are generally available to people with lower credit scores and down payments. These programs make homeownership attainable for borrowers who may otherwise be wedged out.