But Veterans are struggling with affordability
The number of VA purchase loans has increased year-over-year for the seventh consecutive year; but Veterans are suffering from affordability issues; according to two separate reports.
Figures from VA mortgage lender Veterans United Home Loans show that the volume of VA purchase loans has surged 59% in the past five years.
The VA has backed 610,000 loans in the current fiscal year, worth more than $161 billion.
“This historical benefit program has experienced a resurgence since the housing crisis,” said Chris Birk, director of education at Veterans United. “More Veterans have used this $0 down loan in the last five years than in the prior dozen years combined. While the VA’s data show refinance loans cooled in 2018, the purchase market remains strong as more Veterans and military families turn to what’s become the most powerful home loan on the market.”
VA-backed loans now make up around 10% of the total mortgage market and data from mortgage software firm Ellie Mae show that VA loans have seen the lowest average rates on the market for 53 consecutive months.
Low foreclosure rates
VA loans have the lowest foreclosure rate of any loan product over 48 consecutive quarters according to the Mortgage Bankers Association.
“This hard-earned job benefit turns 75 years old in 2019,” Birk said. “The VA loan program continues to fulfill its original mission and help a new generation of Veterans and service members achieve the American dream of homeownership.”
Homeownership rates under pressure
A second report, from Apartment List, shows that on average, Veterans have higher homeownership rates (76% vs. 62%) and lower housing cost burdens than non-veterans (24% vs. 33%).
However, there is a troubling trend it says, as post 9/11 Veterans have become the first and only generation of Veterans to struggle with housing affordability compared to civilians of like ages and demographics (5% more likely).
In contrast, Vietnam Veterans are 10% more likely than civilian peers to be able to afford their housing costs; and First Gulf War Veterans are 25% more likely than civilian peers to be able to afford their housing costs.