As the mortgage statistics below will show, mortgages are some of the most common loans in the world. Mortgages are ideal offering consumers an opportunity to purchase a home and live in it, long before they can afford to buy real-estate outright.
Though it’s difficult to determine the exact value of the global mortgage industry, it’s estimated to be worth around $16.6 trillion dollars (USD). As the most common tool for purchasing a home in most parts of the world, the mortgage is unlikely to disappear any time soon.
Let’s take a closer look at the mortgage statistics offering an insight into the housing landscape for 2022 and beyond.
Key Mortgage Statistics:
- There was around $16.96 trillion in standing mortgage debt in the US by the end of 2021.
- Getting a mortgage is the most difficult part of purchasing a home. 28% of buyers say the process is more complex than they expected.
- The average 30-year mortgage interest rate was 3.28% by the end of 2021, representing a significant drop from the previous year.
- The average credit score for someone getting a mortgage in the US in 2021 was 781, and only around 10% of mortgage applicants had a score less than 677.
- The average interest rate is expected to hike to almost 4% by the end of 2022 for US mortgages.
- Despite the pandemic, mortgage delinquency rates have been decreasing throughout 2021 and into 2022. By the end of 2021, rates were at 4.36% down from a peak of 8.22% in 2020.
Mortgage Statistics: The Mortgage Market
1. The amount of mortgage debt outstanding in 2021 was around $16.96 trillion
The level of mortgage debt in the US decreased somewhat after the 2008 financial crisis, until about 2014 when it began rising again. As of 2021, the mortgage debt in the United States is higher than ever, at an estimated $16.96 trillion.
2. US Home ownership numbers are increasing
During the fourth quarter of 2020, there were 82.87 million owner-occupied homes in the United States. This means the number of homeowners in the US increased by an estimated 2.1 million compared to the previous year.
Pew Research went onto reveal a significant increase in the number of people choosing to purchase their own homes with the help of a mortgage during the pandemic. Around 65.8% of households owned their own homes in 2021, up from a rate of 65.1% the year before.
3. Getting a mortgage is one of the most difficult parts of buying a home
A 2021 survey by the National Association of Resellers found among all buyers, “getting a mortgage” was one of the most difficult parts of the buying process. The issue was most problematic for home buyers between the age of 22 and 30. Other concerns included finding the right property and filling out the paperwork.
According to the NAR, around 28% homebuyers found getting approved for a mortgage to be somewhat, or much more difficult than expected. Around 48% in total said they found the approval and application process to be just as difficult as expected.
4. Younger generations finance more of their homes with mortgages
Notably, the NAR group also found that the majority of buyers financed approximately 88% of their home on average with a mortgage, while paying for only 12% out of their own pocket.
Around 29% of homeowners between the ages of 22 and 30 financed between 95-99% of their purchase with a mortgage. Alternatively, buyers between the ages of 31 and 74 were most likely to use a mortgage for between 80 and 89% of their purchase.
The median down-payment among all ages was 12%.
5. The average 30-year mortgage had an interest rate of 3.28% during December 2021
Mortgage rates were historically low during the pandemic. To help preserve the economy and support those struggling to survive during COVID-19, many lenders reduced their interest rates. The average 30-year rate at the end of 2021 was only 3.28%, compared to over 3.7% during 2020.
The average rate for a 15-year fixed mortgage was only 2.52%, compared to 3.09% in April 2020.
Mortgage Statistics: Rates, Debts, and Refinancing
6. The average credit score of mortgage buyers as of 2021 was 781 in 2021
By the third quarter of 2021, the average credit rate of a consumer hoping to take out a mortgage was 781, down a small amount from 286 in the previous quarter, and just off the record high of 288 reported in 2021’s first quarter.
Only a quarter of borrowers who took out home loans during the summer months of 2021 had a score lower than 729, and only 10% had scores under 677. This indicates credit score is still a crucial consideration for mortgage lenders.
7. The average interest rate is expected to lift to 2.1% by 2024
According to the Federal Reserve, and USA Today, higher mortgage rates are on the horizon. Though mortgage rates were extremely low during the pandemic years of 2020 and 2021, interest rates are set to hike back up again soon. By the end of 2022, the rates are expected to fall around 3.7%, with a predicted rate of 2.1% by the end of 2024.
Despite significant boosts to mortgage interests rates planned going forward, experts predict that a strong economy should still boost the housing market.
8. Mortgage delinquency rates decreased in 2021 to 5.47%
Delinquency issues in the mortgage landscape (or an inability to pay your monthly mortgage costs), can be affected by a host of issues. During 2020, the delinquency rates in the US spiked, starting at 4.36% in the first quarter of the year, then rising to a peak at 8.22%. Since the peak during quarter 2 of 2020, the delinquency rates have begun to drop again. As of Q2 2021, the rate sat at 5.47%.
9. 47% of consumers didn’t even consider refinancing during the pandemic
According to Bankrate, despite historically low interest rates during the Covid-19 pandemic, 47% of mortgage customers didn’t even consider refinancing. Of those who hadn’t refinanced, 23% said they believed it was too much hassle or paperwork. 32% of respondents said they felt they wouldn’t’ save enough money by refinancing.
The survey also found the vast majority of mortgage borrowers have not refinanced (74%), demonstrating a commitment to stick with the same mortgage, even when rates are dropping.
10. More than a third of homeowners don’t know their mortgage rate
Approximately 38% of homeowners don’t know their current mortgage interest rate. The number of people who aren’t sure about their interest rate is even higher among millennials (54%).
Those who did know their interest rate shared a median rate of between 3.57 and 4.57%, which was much higher than the actual average mortgage interest rate at the end of 2021. Notably, while the majority of millennials don’t know their mortgage interest rate, they are more likely to refinance (28%), than Gen X (17%), or baby boomers (17%).
11. Around 4% of all home buyers have had a mortgage application denied
The National Association of Realtors found around 4% of all buyers have had a mortgage application rejected as of 2021. Notably, the people most likely to have had a mortgage rejected were between the ages of 41 and 65.
Among those who had been rejected for a mortgage, a poor debt-to-income ratio was the most significant reason, followed by a low credit score, or an inability to verify the income of the individual applying for the mortgage.
Mortgage Statistics: mortgage Trends
12. The number of online mortgage brokers grew by 2.5% in 2021
According to Ibis World, the number of online mortgage brokers is increasing, alongside the number of online banking institutions and other loan providers. The market for online mortgage brokers was worth $615.9 million in 2021, and the overall market grew by 2.5%.
From the period between 2016 to 2021, the number of online mortgage brokers grew by a total of 6.6%, with significant increases happening during the pandemic periods of 2020 and 2021.
13. The Mortgage industry is experiencing an unprecedented boom
According to McKinsey, the Mortgage banking industry is going through a significant boom, expected to originate around $2.5 trillion for each of the years from 2021 to 2024. This is at least 40% higher than the average annual originations between 2010 and 2019.
14. The most commonly used mortgage programs are FHA loans
According to the Consumer Financial Protection Bureau, the most common way to access a home loan in 2021 was the FHA loan (60.5%), followed by VA loans at 31.8%, and USDA loans at 7.9%.
15. Mortgage credit availability is rising
The MBA (Mortgage Bankers Association) revealed the Mortgage Credit Availability Index (MCAI) which measures the lenders’ standards for extending credit in the US had increased in 2021. By the end of May 2021, the MCAI was 129.9 – the highest level since the pandemic began.
16. US House prices increased by 18.5% in 2021
Rising US housing prices may be one of the reasons why applications for mortgages are much lower as of the end of 2021. US house prices rose by around 18.5% from the third quarter of 2020 to the third quarter in 2021, according to the FHFA house pricing index.
17. Digital innovation is rising in the mortgage world
Surveys by McKinsey discovered expectations for digital mortgage experiences have begun rising dramatically during 2020 and 2021. Around 60% of purchase and refinance borrowers now say they would be happy to complete their entire mortgage application without in-person or phone support.
The same survey found the satisfaction rate of customers drops by around 15% if the lender takes more than ten days to approve an application, indicating a rising need for speed. As a result, lenders seem to be increasing their spending on mortgage technology, with around 80% of lenders saying they plan on increasing their mortgage technology spend up to the year 2025.
18. Mortgage volumes are at a record low
Driven in part by the economic hardships of the pandemic, the mortgage market is facing a massive drop in new customers. According to Reuters, mortgage applications slid to their lowest point in almost two years during December 2021, with a 3% reduction in applications to purchase a home.
According to MSN Money, applications to refinance a home loan are also 42% lower year-over-year as of 2021, demonstrating a shrinking number of consumers who believe they can benefit from refinancing their loans.
The Latest Mortgage Statistics
The latest mortgage statistics indicate that mortgages continue to be one of the most important forms of lending for many of today’s consumers. While times of struggle can definitely place strain on people with mortgages, the overall attitude towards the market remains positive.