Where there’s a will there’s a way! Despite most people struggling to find a home in today’s hot housing market for the ninth fiscal year in a row, mortgages to our Veteran’s increased year-over-year, up 11.4% compared to fiscal year 2019, according to data from the Department of Veterans Affairs. Overall, the Department of Veterans Affairs loan insurance program backed an all-time record high 1.2 million loans.
VA loans used to purchase homes were up 3.6% in fiscal year 2021, the 10th year-over-year increase in a row. The VA backed just over 444,000 purchase loans, an all-time high. The average VA purchase loan was $344,274, up 13% from last fiscal year.
Younger Generations are Aiding Veteran Mortgage Usage
Here’s another interesting statistic: Millennial and Gen Z veterans accounted for 52% of all VA purchase loans in fiscal year 2021, a 6.6% increase from last fiscal year. For the Gen Z group, VA purchase loans were up 84% year over year.
This segment of the buying population is also driving volumes for civilian home purchases. In its annual homebuyers report, the National Association of Realtors stated millennials (those currently aged 22-40) have been the largest share of homebuyers since its 2014 report. Of homebuyers surveyed, millennials accounted for 37% of those who bought homes between July 2019 and June 2020.
VA Loans Offer Help in a Tough Housing Market
Couple this growing demand with a lack of housing inventory, and what we have are runaway home prices. The median price of an existing home sold in October was nearly $354,000, close to a record and up about 13% from a year ago, according to the National Association of Realtors. Prices have climbed from a year earlier for a record 116 straight months, with double-digit percentage gains touching every corner of the U.S. this year.
Prospective homebuyers can overcome barriers to homeownership, even in a seller’s market. For Veterans, using a veteran mortgage loan could give you a more competitive edge in today’s housing market.
The interest rates on VA loans — which are offered by private lenders and partially backed against default by the Department of Veterans Affairs — are typically better than conventional loans. Add that to being able to forgo a 20% down payment opens doors for veterans.
The loan comes with other benefits, too: shorter waiting periods for approval following foreclosure or bankruptcy and no requirement for private mortgage insurance. Today, VA loans actually close at a higher rate than conventional mortgages. For all home purchases in September 2021, 63% of VA loans successfully closed, compared with 46% of all mortgages, according to Ellie Mae.
Homes for Heroes mortgage and real estate specialists understand the process and requirements of VA loans. If you’re looking to buy or sell a home using a VA loan, contact us today. We’ll connect you with a Homes for Heroes specialist near you, and be with you every step of the way.