Why should homebuyers be aware of the latest mortgage statistics and trends? Because purchasing a home is one of the largest investments a person can make, and consequently, a mortgage is the most significant financial responsibility that comes with homeownership.
Hopefully, this article will provide you with some insight into the complex and intricate US home-financing market by delivering the essential details on mortgage rates, types, and lenders.
Here’s all you need to know:
Top 10 Key Facts & Mortgage Statistics for 2022
- Mortgage debt is the biggest form of debt among adult US consumers.
- 44% of consumers in the US have a mortgage.
- The average interest rate for a 30-year fixed mortgage currently amounts to 2.98%.
- New York has the highest mortgage rates — 0.88% higher than the national average rate.
- The 30-year FRM is the most common mortgage loan.
- Mortgage stats show 5.7% of mortgages were delinquent in February 2021.
- 3% of US applicants were denied a mortgage credit in 2020.
- Mississippi is the US state that has the highest mortgage denial rate of 27.3%.
- Women homebuyers pay higher mortgage rates than men in 49 states.
- Fannie Mae provided $1.4 trillion in single-family and multifamily loans in 2020.
Mortgage Debt Statistics
How many American households have a mortgage debt?
1. Mortgage debt is the biggest form of debt among adult US consumers.
(Statista) (Statista)
Total outstanding mortgage debt in the US amounted to a whopping $16.96 trillion in Q1 2021. One-to-four-family residence homes accounted for the lion’s share of this debt at $11.78 trillion.
2. Mortgage debt on farm property has been fluctuating through the years.
(Statista)
The U.S. mortgage statistics from 2020 indicate that the total mortgage debt on farms has been rising over the years. From $167.2 billion in 2011 to $278.7 billion in 2020.
The latest stats concur with this trend and showed a steady rise to $280.8 billion in 2021, as well.
3. The average mortgage payment for US homeowners is approximately $1,500 per month.
(The Mortgage Reports)
This is the average estimation of the US Census Bureau. Still, mortgage rates depend on factors such as credit score, down payments, and debt-to-income ratio (to name but a few). The best and easiest way to determine a monthly mortgage payment — use an online mortgage calculator.
4. 38% of households in the US are mortgage-free.
(Construction Coverage)
When it comes to the states, West Virginia and Mississippi have the largest percentages of paid-off homes, 41.3% and 39.4%, respectively, followed by Louisiana, North Dakota, and New Mexico.
On the other hand, Massachusetts (19.2%) and Maryland (16.6%) have the smallest percentage of paid-off homes.
5. 44% of consumers in the US have a mortgage.
(Bankrate)
The average mortgage debt in 2020 amounted to $208,185. Yet, Americans continued to invest in their homes with the help of home loans and even buying new houses despite the pandemic, encouraged by the decrease in mortgage interest rates.
At the same time, mortgage forbearance data (from October 2020) implies that approximately 3 million Americans used forbearance plans. In other words, they could temporarily stop paying their mortgage.
Mortgage Market Statistics
Are the prices of houses on the rise, and which city has the highest mortgage rates?
6. The average interest rate for a 30-year fixed mortgage currently amounts to 2.98%.
(Business Insider)
There are three main types of mortgages:
- A 30-year fixed-rate mortgage (most used type of mortgage)
- A 15-year fixed-rate mortgage
- A 5/1-year adjustable-rate mortgage
The current mortgage rates amount to 2.98% for a 30-year fixed mortgage, 2.15% for a 15-year fixed mortgage, and 3.1% for a 5/1-year adjustable-rate mortgage. That said, 2020 was a year of record lows when it comes to average mortgage interest rates.
For example, the 30-year fixed mortgage rate amounted to 3.72% in January, compared to 4.75% in the same period in 2019. The rates in 2020 were even lower than rates during the Great Recession.
7. New York has the highest home mortgage rates — 0.88% higher than the national average rate.
(Time)
Next in line is Utah (0.47% higher than the average), Connecticut (0.25%), Indiana (0.18%), and South Carolina (0.16%).
On the flip side, the District of Columbia had the lowest mortgage rates (0.13% lower than the average).
8. In February 2021, the price of houses grew by 12% compared to the same period in 2020.
(PR Newswire)
This represented the highest jump in prices since 2006. Phoenix had the largest year-over-year price growth — 17.4%. San Diego came in second (17.0% price growth), followed by Seattle (15.4% price growth).
9. Based on the public mortgage data, 5.7% of mortgages were delinquent in February 2021.
(CoreLogic) (PR Newswire)
Delinquency rates increased by 2.1% compared to the 2020 data. Louisiana reported the highest percentage of delinquency rate — 9.5%. Mississippi came in second with 8.9%, followed by New York (8.1%), Maryland (7.4%), and New Jersey (7.3%).
Foreclosure rates in February were also up by 16%, compared to the prior month.
Mortgage Statistics on Different Mortgage Types
What’s the current state of different types of mortgages?
10. The 30-year FRM is the most common mortgage loan.
(Investopedia) (SmartAsset)
The average mortgage length is 30 years, although some borrowers might opt for a shorter (15-year FRM) or a longer mortgage — 40 years.
Longer mortgages allow homebuyers to purchase a more expensive home and make lower monthly payments, yet this also means higher interest rates during the life of the loan.
11. Mortgage origination volume in 2020 amounted to $4.3 trillion in mortgages, $2.8 trillion in refinances, and $1.5 trillion in purchase loans.
(Black Knight)
Although mortgage origination volume reached a record in Q4 2020 (since 2005), servicers managed to take a mere 18% from 2.8 million homeowners who refinanced.
12. Residential mortgage backed security issuance amounted to $201.8 billion in 2020.
(Statista)
Mortgaged backed securities were most popular in 2006 when they amounted to a staggering $1.28 trillion. Over the years, they became less popular, amounting to a mere $52.7 billion in 2008 and finally to $201.8 billion in 2020.
13. Mortgage rates will continue to rise.
(Bankrate)
Mortgage facts show that after falling to a record low, the rates are expected to rise gradually, which shouldn’t significantly influence mortgage affordability.
Furthermore, a new trend emerged in 2020 among house buyers — namely, moving to less crowded neighborhoods. This trend is expected to continue in 2021, given that many people switched to working from home.
14. Refinance mortgage loans are on the rise.
(Statista)
Mortgage origination data from Q4 2020 reports that refinance loan mortgage originations reached $851 billion in the mentioned period. In contrast, purchase loan mortgage originations reached $410 billion.
That said, since plummeting in 2013, the refinance loans became less popular among buyers. However, things changed in 2019. Refinance loans became popular again due to the decrease of Federal Reserve fund rates.
15. According to reverse mortgage statistics, the number of HECMs in 2019 dropped to 31,274 — the lowest it’s been in 16 years.
(Statista)
A reverse mortgage loan, or Home Equity Conversion Mortgage (HECM), refers to mortgages insured by the American government allowing homeowners aged 62+ to take out a loan on their property — usually up to 80% of the value.
This loan is repaid only when the borrower moves from the property or passes away.
However, reverse mortgage facts show that in that case, the amount owed is typically much higher than the borrowed amount (due to interest and fees added to the loan).
4 Important Facts About Qualifying for a Mortgage Loan
What are the chances of getting approved for a mortgage loan, and which US state has the highest mortgage denial rate?
16. Credit score plays a determining role in a borrower’s ability to get a mortgage.
(Investopedia)
Applicants with a credit score of at least 580 can qualify for an FHA loan with a minimum down payment of 3.5%, mortgage statistics indicate. A lower credit score would require homebuyers to make a downpayment of at least 10%.
Other lenders might have higher criteria, as many of them demand a credit score of 620 or higher for applicants. Beware of things that can damage your credit rating, such as bankruptcy, a high-interest debt, or credit card debt.
17. 3% of US applicants were denied a mortgage credit in 2020.
(Bankrate)
In 2020, 21% of US consumers who applied for credit got rejected due to low credit scores. 13% got denied for credit card application, 5% for a car loan, 3% for rental and insurance coverage.
Looking at the mortgage loan data, 3% of US consumers were turned down on a mortgage application.
18. Mississippi is the US state with the highest mortgage denial rate — 27.3%.
(Construction Coverage)
The overall denial rates are lower in the Midwest, compared to the South and Southeast, as well as some parts of the Northeast.
On that note, Mississippi has the highest mortgage denial rate, followed by Florida (25%). In comparison, the mortgage denial rate in North Dakota amounts to a mere 10.2%.
19. Mortgage discrimination statistics reveal that American Indian or Alaskan Native and black borrowers are more likely to be denied a conventional mortgage.
(Construction Coverage)
Black, American Indian or Alaskan Native, together with applicants of two or more minorities, have the highest denial rates (nearly 40%). Native Hawaiian and other Pacific Islander applicants have almost 35%, while Hispanic applicants (almost 30%) follow close behind.
In contrast, White, Asian, and applicants of different races (Joint) have the lowest denial rates.
Who’s Paying a Mortgage?
Do women pay higher mortgage rates than men, and who makes the highest share of homebuyers in the US?
20. First-time homebuyers in the US have higher average mortgage rates than repeat buyers.
(Forbes)
First-time home buyer statistics from 2020 show that the average mortgage rate for first-time buyers was a bit higher (3.34%) than repeat buyers’ rates (3.25%).
Furthermore, first-time FHA borrowers also had higher interest rates (3.39%) than repeat FHA borrowers (3.33%).
On that note, in 2020, 31% of homebuyers in the US were first-time buyers.
21. 28% of Millennials finance the total house purchase price with a mortgage.
(NAR)
Millennial home buying statistics from 2021 suggest that Gen Y makes the largest share of homebuyers in the US — 37%, to be exact. Moreover, 82% of younger Millennials (aged 22–30) and 48% of older Millennials (aged 31–40) were first-time home buyers.
17% of younger Millennials and 11% of older Millennials financed the total house purchase price with a mortgage.
22. Women homebuyers pay higher mortgage rates than men in 49 states.
(Inman)
Mortgage statistics denote that for example, in Mississippi, women will pay $7,077 more, on average, than men when it comes to a mortgage. Likewise, the average mortgage interest rate amounts to 3.47% for women and 3.37% for men in the mentioned state.
The difference in mortgage rates can be seen in other states as well, from Alabama (3.44% vs. 3.36%) and Ohio (3.42% vs. 3.34%) to New Jersey (3.26% vs. 3.18%).
Alaska is the only US state where women pay lower mortgage rates (3.21% vs. 3.23%).
Who Are the Largest Mortgage Lenders?
Who is the current leader in mortgage lending?
23. Based on the mortgage statistics from 2019, Wells Fargo was the leading mortgage lender in the US with $305.63 billion in mortgage lending.
(Statista)
Chase was the second-rated lender in the US, with $177.08 billion in mortgage lending. Quicken Loans ($145.88 billion), Bank of America ($143.09 billion), and United Shore Financial Services ($99.01 billion) followed behind.
However, data on mortgage origination volume from 2019 shows us that during the same year, Quicken Loans was the leader in mortgage loan originations (541,000).
24. The market share of commercial banks in residential mortgage lending declined from 74% to 52% from 2007 to 2014.
(Shelving Rock)
Over the past decade, FinTech lenders — companies that offer application processes that can be entirely completed online — have turned into an important source for mortgage loans, US mortgage statistics reveal. Especially now that the market share of banks has also declined.
25. 80% of applicants are looking for refinancing from FinTech lenders.
(The Terner Center) (Shelving Rock) (New York Fed)
Conversely, merely 48% seek this option from traditional lenders.
Overall, FinTech lenders are more efficient, and they underwrite a high percentage of FHA-insured loans that serve applicants with lower income or markets that banks can’t enter due to regulation.
This, as mortgage origination statistics show, has led to a steady rise in lending for FinTech companies, climbing from $34 billion of all originations in 2010, or 2% of the market, to $161 billion (i.e., 8% of the market) just six years later.
26. Fannie Mae provided $1.4 trillion in single-family and multifamily loans in 2020.
(Investopedia)
Fannie Mae (aka. FNMA) is a government-sponsored entity that provides easier access to liquidity to banks and other mortgage lenders, allowing them to underwrite and fund more loans. In 2020, the entity managed to give the largest liquidity amount in its history.
FAQs
What percentage of homeowners have a mortgage?
44% of homeowners in the US have mortgage debt. The average mortgage debt for US consumers in 2020 amounted to $208,185.
The highest mortgage debt in 2020, an average of $437,976, was recorded in the District of Columbia, followed by California (an average of $371,981), Hawaii ($348,637), Washington ($278,851), and Colorado ($273,718).
How many mortgages are there in the US?
In June 2020, home mortgages accounted for $9.78 trillion of the total debt of American consumers, which reached a total of $14.3 trillion.
Just for comparison, the second-biggest component was student loan debt amounting to $1.54 trillion, which is $8.24 trillion lower.
How many mortgages are originated each year?
In Q3 2020, the number of mortgage originations in the US reached approximately $1.076 billion. This was the highest peak since Q3 2003, when mortgage originations reached $1.199 billion.
Since 2003, the number of mortgage originations fluctuated, reaching its lowest amount in Q1 2011 — $246 billion, followed by a rise in Q4 2011 ($474 billion).
In Q1 2019, the number of mortgage originations amounted to $325 billion, after which there was a rise in numbers.
What percentage of the UK has a mortgage?
Over 20 million people in the UK had a mortgage back in 2020. Based on one survey, many UK homeowners don’t understand the meaning behind the term.
In fact, 7 in 10 don’t understand the meaning of APR (“annual percentage rate”), 50% have no idea what a fixed-rate mortgage is, and 64% can’t explain the term “re-mortgage.”
Additionally, 84% of British homeowners believe that mortgages should be taught in schools.
Can I get a mortgage 7 times my salary?
In short, yes, you can get a mortgage for seven times your salary. However, lenders might offer you seven times income mortgages only if they believe the circumstances are right.
In other words, lenders will offer their money to people who earn above the minimum limit they set. Investment bankers and doctors are more likely to get a seven times income mortgage than people from other professions who earn less.
Why is a 30 year mortgage bad?
Although the 30-year fixed-rate mortgage is the most common type of mortgage among US homeowners, that doesn’t necessarily mean it’s the best choice. First of all, it’s costly. Namely, because you’ll have to pay twice as much in interest rates. For example, a 30-year fixed-rate mortgage currently has an average APR of 2.98%.
For comparison, mortgage loan statistics show the average APR of a 15-year fixed mortgage is 2.51%.
And last but not least, a 30-year fixed-rate mortgage lasts for 30 years, so it’s not an ideal choice for retirees.
Bottom Line
Historically low-interest rates might tempt buyers into taking out a mortgage loan. However, experts advise against it — especially as we still aren’t fully aware of the far-reaching consequences the coronavirus outbreak will have on home purchasing and mortgage statistics and demographics, the market, and the economy in general.
To this end, it might even be a good idea to get some professional advice from an accountant before taking out a mortgage loan.
Sources:
- Bankrate
- Bankrate
- Bankrate
- Bankrate
- Black Knight
- Business Insider
- Construction Coverage
- Construction Coverage
- CoreLogic
- Experian
- Fool
- Forbes
- Huuti
- Inman
- Investopedia
- Investopedia
- NAR
- New York Fed
- PR Newswire
- PR Newswire
- Shelving Rock
- SmartAsset
- Statista
- Statista
- Statista
- Statista
- Statista
- Statista
- Statista
- Statista
- Statista
- The Mortgage Reports
- The Terner Center
- Time
- Yahoo Finance
