Mortgage lending hit 16-year low in 2011

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House and money
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(CBS/AP) WASHINGTON - Home mortgage lending in the U.S. fell last year to the lowest level in 16 years, a reflection of the weak housing market.

The number of home mortgages issued last year dropped more than 10 percent, to about 7.1 million from 7.9 million in 2010, according to a report from the Federal Reserve released Tuesday.

The 2011 total was the lowest since 1995, when 6.2 million home loans were made.

Home purchase loans declined about 5 percent in 2011. The expiration a federal tax credit for first-time buyers in 2010 may have been a factor, the report noted.

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Refinance loans plummeted 13 percent, even though mortgage rates have been near record lows for some time. The data also showed continued stagnation of lending in poor neighborhoods.

Mortgage rates continue to hover near record lows. The average 30-year fixed-rate mortgage has been below 4 percent all but once this year, and the rate on 15-year mortgages has been below 3 percent since the last week of May.

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