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2023 U.S. Mortgage Statistics and FAQ

Mortgage demand drops to 27-year low as interest rates pull back

Since the rock-bottom rates of 2020 and 2021, mortgage rates have risen, making it harder to buy a house and making refinancing less appealing for the majority of homeowners.

However, many anticipate rates to decline by the end of 2023, potentially returning to the 5 percent area.

Mortgage data and statistics

 

  • Residential mortgage debt in the U.S. totaled $11.92 trillion as of the fourth quarter of 2022, according to the Federal Reserve Bank of New York.
  • Commercial real estate debt in the U.S. totaled $5.62 trillion in 2022, according to commercial real estate data provider Trepp.
  • Mortgage lenders issued 1.52 million residential loans in the fourth quarter of 2022 — the biggest decline since 2014, according to ATTOM.
  • The average balance for a first mortgage reached a record high in 2022, at $323,780, according to the Mortgage Bankers Association.
  • Sixty-two percent of respondents to a 2023 John Burns Research & Consulting survey believe 5.5 percent is the “historically normal” mortgage rate, with 71 percent of would-be homebuyers reluctant to purchase at a rate higher than that.
  • Less than 500,000 mortgages were refinanced in the fourth quarter of 2022, representing the lowest volume since 2000, according to ATTOM.
  • HECM (reverse mortgage) activity fell 48.2 percent in April 2023, according to reverse mortgage data provider Reverse Market Insight.

Mortgage origination volume by loan type

 

Loan type Origination volume, 2022
Note: These figures represent first-lien data only.
Source: Urban Institute
Conventional 53.2%
Portfolio 23.7%
FHA and VA 19.8%
Private-label securities 3.3%
  • Conventional mortgages aren’t backed by the government. Most mortgage lenders offer these loans, which come in a range of terms with fixed or adjustable interest rates.
  • FHA loans have more flexible credit and other qualifying criteria than conventional loans, but require borrowers to pay mortgage insurance in addition to the monthly payment.
  • If you’re a veteran or surviving spouse, you might qualify for a no-down payment VA loan.
  • Likewise, some borrowers in specific rural areas might qualify for a no-money down USDA loan.
  • Unlike the majority of mortgages sold to Fannie Mae and Freddie Mac, portfolio loans aren’t sold to investors.

Mortgage origination volume by loan term

The most popular type of mortgage is the 30-year home loan, which gives homebuyers three full decades to pay it off, meaning smaller payments over a longer period of time.

Type of mortgage Marketshare Originations (Dollar volume)
Source: Home Mortgage Disclosure Act data, 2021
30-year fixed-rate 70% $3.91 trillion
15-year fixed-rate 9% $486.73 billion
5/1 ARM 1% $83.71 billion
7/1 ARM 2% $117.45 billion
Other fixed-rate terms (such as 10 or 20 years) 10% $583.73 billion
Other ARM terms (such as 10/1, 5/6 and 7/6) 7% $410 billion

Current and historical mortgage rates

Today’s mortgage rates are much higher than they were in recent years, dramatically pushing up monthly payments and making it harder for renters to get into the market. Still, today’s rates are close to the historical average.

The initial economic fallout from the pandemic made borrowing money cheap, but if you were buying a home in 2020 and 2021, you had to contend with both record-low mortgage rates and record-high home prices. Those record-low rates were especially attractive to homeowners, who took advantage of the opportunity to refinance.

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The housing market changed in 2022, when the Federal Reserve began raising interest rates. Those moves, coupled with inflation and other factors, put the brakes on the home-selling frenzy and shut even more buyers out of the market.

The Fed has signaled it could pull back on the tightening in 2023 as inflation settles, which could bring mortgage rates back to a more affordable level.

Source | Bank Rate
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