Statistics

13 Mortgage Statistics To Make Sense Of The Housing Market

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Authentikos Research Team

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July 30, 2021

Owning a home is often considered part of the American dream and ends up being one of the biggest assets a person has. it comes with a positive financial impact, however a mortgage is not for the faint of heart. Having a mortgage is a commitment that can last decades all while the home could pose its own set of challenges. Though it appears more beneficial than renting a home, prices and debt has skyrocketed. 


The housing market influences the mortgage industry and vice versa. It’s a common song and dance that we witness the ebbs and flows. Even with a hot housing market that drove 9.2 million loans in 2019, it put the country in $16.6 trillion dollars of mortgage debt as of 2020. It is startling to realize that what was once the American dream could possibly be detrimental to the American economy.


We will examine the highs and lows of mortgage, the key mortgage industry statistics that best sum up the housing and financial loan sectors. Many could be surprised by data surrounding young home buyers and other vital mortgage data points that can provide an inside look at where the country stands! 


Key Mortgage Statistics:

  • $16.6 trillion mortgage debt in the U.S. 
  • 3.94% U.S. interest rate of conventional 30-year fixed rate mortgage 
  • 3.19% U.S. interest rate on conventional 15-year affixed-rate mortgage 
  • Approximately 11,200 institutions originated at least one closed-end mortgage loan, with a total origination volume of about 9.2 million loans in 2019
  • Millennials made up the largest share of home buyers at 37% in 2019.
  • The median monthly monthly housing cost was $1,566 in 2018. (S. Census Bureau, 2018)


U.S. Mortgage Data: How are Americans spending their money? 


  1. The U.S. has $16.6 trillion in mortgage debt.

Source: Statista


Even during the novel COVID-19 pandemic, the housing market was active and people continued to buy houses. Some saw it as an opportunity to purchase a first time, downsize because of home maintenance or invest in a larger home as people remained hunkered down under one roof for work, school and their day-to-day lives. Meanwhile, the housing market was unforgiving to the growing mortgage debt in the U.S. Looking at 2020 mortgage industry statistics, specifically in November, the country had raked up a whopping $16.6 trillion in mortgage debt. As if that’s not enough, it has likely increased since then. This skyrocketing debt poses the question - will America ever get back on track? 


  1. Approximately 11,200 institutions originated at least one closed-end mortgage loan, with a total origination volume of about 9.2 million loans in 2019

Source: consumerfinance.gov


The housing market and mortgage industry do not sleep and can influence one another through the ups and downs. For example, when rates go down, the housing market seems to boom, more than usual, thus creating a demand around mortgages. It’s not a surprise how many mortgages were originated in 2019 because it was the final strong push before the world shut down temporarily in early 2020. According to mortgage statistics, approximately 11,200 institutions originated at least one closed-end mortgage loan for a total origination volume of about 9.2 million loans. Soon after 2019 concluded and for a short period of time during the pandemic, the mortgage origination volume dropped significantly.  


  1.  15.1 million applications and 9.3 million originations under HMDA.

Source: consumerfinance.gov


Here’s a mortgage industry lesson - The Home Mortgage Disclosure Act (HMDA) was  enacted by Congress in 1975 and requires financial institutions to report and publicly disclose loan-level information related to mortgages. Here's why - The data helps show whether or not lenders are serving their community’s housing. The data also gives public officials information to help them make informed decisions and policies while being able to examine if there are any discriminatory lending patterns that could be discriminatory. So, why is this important to know? Well, you see, in 2019 there were 15.1M mortgage applications and 9.3M originations under HMDA, which is one of the most important mortgage origination statistics that is widely used when examining the industry. 


Home Buying Statistics: Who is buying the most? 


  1. Millennials made up the largest share of home buyers at 37% in 2019.

Source: NAR


As mortgage applications poured in at 15.1M in 2019, some may wonder, “ Who is submitting all these applications?” As it turns out, in 2019, millennials made up the largest share of home buyers at 37%. Surprised? Wouldn’t blame you if you weren’t. There have been reports about how millennials are living their lives, putting kids and marriage on the back burner, and purchasing homes to either live or for investment purposes. Gone are the days where it’s assumed that it’s mostly families buying homes! As more mortgage statistics roll out, there are more insights to who the common buyers are, their habits and what expenses look like! 

  1. 25% of Gen X are selling their homes, likely to the 37% of millennials buying property! 

Source: NAR


As you just learned, 37% of homebuyers are millennials, proving wrong common misconceptions about the generation and their commitment issues. Sure, there are a lot of new housing developments popping up, but are there enough for the budding millennials looking to create a home? Well, thanks to 25% of generation X reaching retirement, looking to downsize or just want to release their assets, more homes have hit the market, making them available to the quick young home buyers. Think about it - if gen X weren’t relinquishing their homes, would millennials still be a prominent buyer group? 

  1. Married couples make up 63% of homebuyers. 

Source: NAR


Sure, millennials now account for a significant portion of homebuyers, but According to home buying statistics, married couples make up nearly two-thirds of homebuyers. Adding a house to your asset portfolio seems like an obvious decision when getting married, almost like a box to check, and will end up before the most valuable asset they own. As it turns out, there are benefits to waiting to buy a home until you are in a legal partnership such as securing a bigger loan or having more income to debt ratio that also impacts the decision. 


As time goes on, it’s the married couples, especially young home buyers, that will eventually grow out their first home, and end up selling it to one of the younger generations? Sound familiar? Think about it - it’s happening as we speak while Gen X sells their homes to millennials. 

Homeowner Stats: Numbers young home buyers should know


  1. 3.94% U.S. interest rate of conventional 30-year fixed rate mortgage 

Source: Statista


From coast to coast, millions of homes are bought and sold,  according to common mortgage industry statistics. Depending on where you look, you could expect a home to cost triple (or maybe even quadruple) somewhere else. Living expenses in certain regions will not waiver. Rather, they will continue to skyrocket which is why many people are fleeing to more affordable states (we are looking at you California!). However, for those sticking around the West Coast, wanting to possibly face the median home price tag of $640,330, you’ll likely want to spread your mortgage out over a few decades. As home buying statistics show, buyers who are opting for a conventional 30-year fixed rate mortgage may see an interest rate of 3.94%.


  1. 3.19% U.S. interest rate on conventional 15-year affixed-rate mortgage 

Source: Statista


We’ve already explored the high end of the home buying with a longer commitment, but that is not the only option out there. The average length of home ownership is less than a decade which means people don’t always stick around in the original home they purchased. Again, for one reason or another people tend to shop around and buy a new home that better fits their life.


When home buyers decide to commit to a shorter term mortgage, the interest rate may be less. According to U.S. mortgage data, when comparing a 30-year fixed mortgage’s interest rate of 3.94%, and considering a 15-year affixed-rate mortgage (which tend to be significantly more), the interest rate in the U.S. is 3.19%. Now, we are not human calculators, but it’s safe to assume that there is an opportunity to reduce costs when opting for a 15-year affixed-rate mortgage, but for young home buyers, a higher monthly cost for a shorter period of time may not be the preferred route.


  1. In 2019, the average mortgage loan amount was $184,700 

Source: FHFA


American’s have a lot of mortgage debt (as we’ve already examined), and when you break it down to per person, it’s also a significant amount of debt. To better understand the country’s debt, homeowner stats show that the average mortgage loan amount was $184,700 in 2019. Some people could pay for their four-year education with that amount, but a home puts a roof over their head and is a valuable asset that can continue to grow in value. 



  1. The median monthly housing cost was $1,566 in 2018. (S. Census Bureau, 2018)

Source: U.S. Census Bureau


Young home buyers, like millennials, are buying homes across the country, ranging in costs from under $100,000, and possibly reaching as high as six figures. However, according to U.S. mortgage data, the median monthly housing cost was $1,566 three years ago, and has likely been increasing. $1,566 going toward a home instead of paying a monthly lease for a home you don’t own is a more financially sound decision for many people. However, there’s no right or wrong when it comes to renting versus buying, but a good question to ask yourself is, “ Would I rather be putting my money toward a home of my own?” While $1,566 seems management for a monthly payment, this total may be lower than the average first price home! 

U.S. Mortgage Refinance Statistics: Refinancing - friend or foe? 


  1.  In December 2020, applications to refinance a home loan were 105% higher than the same week one year ago.

Source: MBA


Was 2020 all a blur to you? The days blurred into one another and no real end in sight? 2020 posed a whole other set of trials and tribulations for the housing and mortgage industries alike. Even though homebuying did not come to a strong halt, refinancing jumped, as U.S. mortgage refinance statistics show! When comparing December 2019 to December 2020, applications to refinance a home loan were 105% higher. That’s right - 105%! Homeowners were quick to act on the decline in rates in December 2020. Securing a lower rate is just one of the reasons a homeowner would consider refinancing. Others include: To shorten the term of their mortgage, convert from an adjustable-rate mortgage to a fixed-rate mortgage (or vice versa) or leverage home equity to raise funds in case of a financial emergency.



  1. On average, borrowers who refinanced their first lien mortgage in the first quarter of 2020 lowered their rate by about 0.75 percentage points.

Source: Freddie Mac


In case you missed it, refinancing a mortgage could mean securing a lower rate, which is why refinance applications shot up 105% in December 2020, according to U.S. mortgage refinance statistics! It’s a smart move to refinance, especially if it will save money. It is doubly beneficial when homeowners opt to refinance for a lower rate and can secure a shorter term mortgage. On average, those who refinanced their first lien mortgage in the Q1 of 2020 lowered their rate by about 0.75 percentage points. Imagine the money that these homeowners saved! How much would it take for you to refinance? 


  1. In October 2020, 43% of 30-year mortgage holders—or 18.9 million borrowers—are refi-eligible. 

Source: Blackknight


Let’s assume you’re a homeowner, and you’re hearing rumblings about lower rates which sparked a question in your mind, “ Should I refinance?” Well, before you get too ahead of yourself, the better first question to ask is, “Am I eligible to refinance?” The answer to that question will impact what you do next. Well, you aren’t alone. According to mortgage statistics from Blackknight’s Mortgage Monitor, 43% of 30-year mortgage holders—or 18.9 million borrowers—were refi-eligible as of October 2020. When  you think about it, it’s no surprise that refinance applications jumped over 100% when you think about how many eligible borrowers there were! 


Conclusion


What a whirlwind the housing and mortgage industry (especially when combined) and it can be overwhelming to navigate the home buying process ,especially for young home buyers. From understanding where the debt originates from, who are the drivers of those costs, and the benefits of refinancing, there’s a hope that through learning key mortgage statistics, you feel more informed and knowledgeable about the industries. 


If you would like to speak to an Authentikos Advisor about your nest-egg needs, click here to schedule an appointment for a discovery call!



Sources:


  1. Statista
  2. Consumer Finance (GOV)
  3. Consumer Finance (GOV)
  4. NAR
  5. NAR
  6. NAR
  7. Statista
  8. Statista
  9. FHFA
  10. U.S. Census Bureau
  11. MBA
  12. Freddie Mac
  13. Blackknight Mortgage Monitor

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