Home loan activity through the Department of Veterans Affairs has jumped to a new high, climbing 114% since the beginning of the 2020 fiscal year, according to VA data. Refinance loans are a big portion of the increase, with homeowners looking to lock in lower mortgage rates.
During the first three quarters of fiscal 2020, the VA loan program backed more than 865,000 loans—a record high. The VA’s fiscal year doesn’t end until Sept. 30, and its home loan program could back over 1 million more loans before then, Veterans United Home Loans predicts. The VA’s previous record was set in 2017 with 740,386 loans.
VA purchase activity is up 7% year over year. Millennial and Generation Z buyers are fueling the growth, Veterans United Home Loans reports. They were the only age demographics to see year-over-year increases in the third quarter of the fiscal year. Despite lenders tightening their credit requirements and employment checks during the pandemic, VA loans had timely closings. The average VA purchase loan in June closed in 47 days, one day faster than a year ago, according to Ellie Mae data.
Some metros are seeing activity surge faster than others. For example, in Honolulu, VA loan activity has jumped nearly 206% higher than a year ago, followed by increases in San Diego (178%) and in Baltimore (171%).
Source: Veterans United Home Loans
