Mortgage Statistics: 2024

Breaking the Bank: Unveiling the Ultimate Mortgage Moves for 2024 – Transforming Financial Dreams into Home Reality!

The housing market experienced robust demand throughout 2020 and 2021, driven by historically low mortgage rates and substantial personal savings, resulting in a surge in homebuying activity. However, the landscape has rapidly evolved, and while the housing market is not in a crash, the combination of increasing interest rates and consistently high home prices has led to a significant reduction in mortgage demand compared to early 2022.

Nevertheless, it’s important to note that Americans collectively owe a substantial $12.14 trillion in mortgage debt, representing a significant 70.2% of total consumer debt in the United States. Despite interest rates trending above 7.00%, there is still notable demand for mortgages, with individuals across the country grappling with the complexities of the current challenging housing market. This underscores the importance of gaining insights into how Americans manage their mortgages, as it is integral to understanding the broader landscape of American finances.

To shed light on this subject, Cafecredit analyzed diverse data sources to compile an overview of mortgage statistics. This examination provides valuable insights into the extent of mortgage debt held by Americans and sheds light on how they utilize and navigate this financial obligation.

Key Points

• Americans carry a collective mortgage debt of $12.14 trillion across 84.0 million mortgages, averaging $144,593 per individual with a mortgage on their credit report. This constitutes 70.2% of consumer debt in the United States.
• In addition, Americans have accumulated $349 billion in debt on 13.1 million home equity lines of credit (HELOCs), translating to an average of $26,702 per account. This outstanding HELOC debt represents 2.0% of the overall U.S. consumer debt.
• The average interest rate for a 30-year fixed mortgage in 2023 stood at 6.79%, ranging from a low of 6.09% during the week of Feb. 2 to a high of 7.79% during the week of Oct. 26.
• New mortgage debt originating in the first three quarters of 2023 reached $1.1 trillion. Of this, 77.4% was extended to super-prime borrowers with credit scores of at least 720, while 3.6% went to subprime borrowers with scores below 620.
• For home purchase mortgages facilitated through the LendingTree platform in the 12 months ending October 2023, the average size was $224,398. Notably, average loan sizes were highest in Hawaii ($464,994), the District of Columbia ($355,986), and Massachusetts ($309,490), and lowest in West Virginia ($150,245), Iowa ($153,405) and Michigan ($160,707).
• Over the 12 months concluding on September 30, 2023, there were 144,880 new foreclosures. In August 2023, 2.6% of mortgage accounts were at least 30 days past due, and 1.2% were at least 90 days past due, representing year-over-year decreases of 7% and 20%, respectively.
• During the second quarter of 2023, 2.0% of mortgages, equivalent to 1.1 million residential properties, were labeled as “underwater,” indicating that the outstanding mortgage balance exceeded the estimated sale price of the home.
• At the close of the second quarter of 2023, American households held $31.7 trillion in real estate equity, constituting 71.2% of their property value. This marked a 1.9% decline from the second quarter of 2022, when Americans held $32.3 trillion in real estate equity.

Average US Inflation Rate Data

The substantial surge in outstanding mortgage debt can be attributed to more individuals holding active mortgages and generally more significant mortgage amounts.

Historically low mortgage interest rates enabled numerous buyers to raise their purchase prices and leverage cash-out refinances, all while preserving comparable monthly payments to those feasible in the recent past with smaller loan sizes.

Outstanding mortgages

Source: Federal Reserve Bank of New York data *Individuals with shared bank accounts may double-count when a mortgage account is on their credit report. The information provided pertains to data from the third quarter of 2023.

Outstanding HELOCs

Source: Federal Reserve Bank of New York data *Individuals who hold joint accounts may be doubly counted when a Home Equity Line of Credit (HELOC) account is listed on their credit report. The data presented reflects information up to the third quarter of 2023.

Mortgage Rates

The highest recorded mortgage interest rates for a 30-year fixed loan reached 18.63% in 1981, with a weekly average of 16.64% for that year. Remarkably, rates remained above 10.00% from November 1978 to April 1986 without experiencing a drop.

In the last five decades, mortgage rates have experienced a significant shift. They fell below 5% for the first time in 2009, a result of the Federal Reserve’s proactive reduction of target rates to address the repercussions of the Great Recession spanning from 2007 to 2009. Subsequently, rates dipped below 4% in late 2011 and below 3% in 2020.

The average mortgage rates reached an unprecedented low of 2.65% during the initial week of 2021. Looking back at the 30 years from 1972 to 2001, the lowest recorded weekly rate was 6.45%, occurring in November 2001. However, by August 2023, weekly average mortgage rates surpassed 7.00%, marking the first instance since November 2022. Notably, the weekly average rate for October 26, 2023, stood at 7.79%, the highest observed over two decades.

Historical interest rates for 30-year conventional mortgages

Source: Federal Reserve Data *Please note that the data for the year 2023 is accurate as of the week of November 16.

Mortgage Originations

The mortgage market experienced a significant decline in originations as interest rates increased from their historic lows in 2021. Specifically, mortgage originations plummeted to $2.75 trillion in 2022, a substantial decrease from the $4.51 trillion recorded in the previous year. The trend continued into 2023, with originations for the first three quarters totaling $1.1 trillion, indicating a pace that could halve the 2022 figure of $2.2 trillion.

The year 2021 marked a notable peak in annual origination volume over the past two decades, reaching $4.51 trillion. The exceptionally low-interest rates during that period allowed borrowers to secure larger loans while maintaining similar monthly payments, prompting a surge in new loans and a significant wave of mortgage refinancing.

Examining the years leading up to the subprime mortgage financial crisis of 2007 to 2010, origination volume was elevated. During that time, subprime borrowers with credit scores below 620 played an unusually prominent role, comprising 13.6% of the origination volume in 2006. Conversely, super-prime borrowers with scores of at least 720 accounted for their smallest share that year at 53.5%. In contrast, in 2020 and 2021, subprime borrowers constituted only around 2% of the origination volume, while super-prime borrowers comprised approximately 84%.

Average Mortgage Size for Home Purchases by State

The loan amounts for home acquisitions exhibit significant variability based on geographical location and the prevailing local property prices.

In the 12 months concluding in October 2023, the mean sum borrowed via our platform for home acquisitions, excluding down payments and closing costs, showed a notable range from $150,245 in West Virginia to $464,994 in Hawaii.

Source: Equifax Panel Data

From November 2022 to October 2023, the average cost of purchasing a home in the United States, encompassing down payments, significantly surpassed our platform’s $224,398 average mortgage amount. Nationally, the average home price reached an unprecedented peak in the fourth quarter of 2022, hitting $552,600, before experiencing a decline to $513,400 in the third quarter of 2023.

This notable fluctuation was partly attributed to reduced mortgage rates, contributing to a substantial surge in home prices post the onset of the pandemic when the national average home purchase price stood at $374,500. In the 2.5 years leading up to the pinnacle in the fourth quarter of 2022, there was a noteworthy increase of $178,100, marking a 47.6% ascent. Despite the subsequent price decrease, the average price in the third quarter of 2023 remained $138,900 higher, translating to a 37.1% increase compared to the pre-pandemic levels.

Delinquencies and Foreclosures

The proportion of mortgage debt classified as seriously delinquent, defined as 90 days or more past due, is approaching a historic low. However, it is crucial to note that this figure reflects the percentage of total outstanding debt and not the count of individual accounts.

As reported by the Federal Reserve Bank of New York, in September 2023, 0.5% of mortgage debt was at least 90 days late. Extrapolating from the August 2023 seriously delinquent loan rate (the most recent data available from CoreLogic), this approximately corresponds to 1.2% of individual loans.

As previously mentioned, 2021 witnessed a substantial increase in the overall volume of dollars originated as mortgage debt, with a historically significant portion allocated to super-prime borrowers. This trend is expected to mitigate the risk of delinquency or foreclosure.

Nevertheless, there is a notable point of concern for the future. Toward the end of 2021, a noticeable uptick in mortgage debt became 30 days overdue, marking a departure from the sharp declines observed during the pandemic. While it is anticipated that most of these borrowers will promptly catch up, it is crucial to recognize that every instance of delinquency initiates with a single missed payment.

Number of new foreclosures

Sources: Federal Reserve Bank of New York/Equifax panel. Note: 2023 data is through the third quarter.

Cafecredit Methodology

In conducting the Mortgage Statistics 2024 analysis, data was gathered from authoritative sources such as the Federal Reserve, Federal Reserve Bank of New York, and Equifax panel, spanning up to the third quarter of 2023. The primary objective of this study is to offer a comprehensive understanding of the current state of the U.S. mortgage market, emphasizing critical indicators like outstanding mortgage debt, home equity lines of credit (HELOCs), mortgage rates, originations, average mortgage sizes across states, and trends in delinquency and foreclosures.

Noteworthy insights were derived from Equifax panel data and the LendingTree platform, providing a nuanced perspective on the diverse aspects of the mortgage landscape. The analysis encapsulates the transformative dynamics of the housing market, including shifts in mortgage demand influenced by fluctuating interest rates and home prices. The presented data sheds light on Americans’ financial behaviors and obligations, contributing to a holistic comprehension of the intricate relationship between mortgages and the broader landscape of personal finance.

Sources

• Federal Reserve
• Federal Reserve Bank of New York/Equifax panel
• Federal Reserve Bank of St. Louis