2020 marks the biggest year in the history of lending at the U.S. Department of Veterans Affairs, Chris Birk, director of education at Veterans United Home Loans, told Bankrate.com.
The volume of mortgages backed by the VA has drastically increased: VA loan volume nearly doubled from 2019 to 2020. This also marks the first time that the VA has issued more than 1 million loans in one year.
“This was truly a historic year,” Birk says.
VA loans once comprised just 2 percent of overall loan volume. They now make up about 10% of the mortgage market.
The demand mostly is being driven by younger vets, Birk told Bankrate.com. VA loans require no down payment. They also have less stringent requirements for credit scores.
“They don’t need to spend years saving for a down payment,” Birk told Bankrate.com. “They’re able to jump into the housing market well ahead of their civilian counterparts.”
Some of the metro areas seeing the largest growth in VA loans in the third quarter of this year compared to the year prior, according to Veterans United Home Loans, are:
- Honolulu: 205.65%;
- San Diego-Carlsbad-San Marcos, Calif.: 178.15%;
- Baltimore-Towson, Md.: 171.56%;
- Los Angeles-Long Beach-Santa Ana, Calif.: 170.97%;
- Washington-Arlington-Alexandria, D.C.-Va.-Md.-W.Va.; 169.42%
- Sacramento-Arden-Arcade-Roseville, Calif.: 157.99%;
- Indianapolis-Carmel, Ind.: 148.80%;
- Houston-Sugar Land-Baytown, Texas: 137.90%;
- Austin-Round Rock, Texas: 135.14%
Source: “5 Housing Trends for 2021: What’s Ahead for Mortgage Rates, Home Prices, Flight to Suburbs?” Bankrate.com (Dec. 14, 2020)
