30+ Mortgage Statistics: Rising Rates and Home Prices

Written by Elijah BishopUpdated: 28th Mar 2022
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For the average American, one of life’s biggest objectives is to own a home. It represents much more than just owning a home; it represents years of hard work, security, and settling down.

However, for many Americans, the ambition of buying a home appears to be a pipe dream due to escalating property prices and years of economic instability. Today, buying a home is only achievable with the support of a mortgage for many potential homebuyers. That is why staying up to date on the newest mortgage statistics can help better understand today’s market.

So, check out these eye-opening mortgage statistics to discover more about the present situation of mortgages in the United States and how it can impact your home buying experience!

Mortgage Statistics: Editor’s Choice

  • The average monthly mortgage payment is $1,297.
  • The median monthly mortgage payment is $975
  • 65 percent of U.S. adults own a home.
  • Current mortgage debt in the United States is $10.04 trillion.
  • First-time home buyers in 2021: 31% of purchasers
  • The average credit score: Conventional (756), FHA (676), and VA credit scores (720)

Mortgage Statistics: Trend Analysis & Hidden Insight

#1. The average down payment for a house in the United States is about 6%

Mortgage experts have traditionally advised borrowers to make a down paymentequal to 20% of the buying price of their new house. In today’s real estate circles, this counsel has evolved from pragmatic to aspirational. Many houses are being acquired with a 1% down payment. Rising property prices are cited as a major influence in mortgage origination data, and there is little indication that this trend will reverse very soon.

#2. 63% of homeowners in the US have mortgages

Buying a new home with cash is not an option for most Americans, especially if it is their first home. To amass that kind of wealth would take decades. According to all mortgage industry statistics, mortgage financing is the only viable path to homeownership for young people in particular.

>> More: Important Real Estate Statistics 

#3. More than 6 million home sales occur in the United States every year

Home sales in the United States increased significantly in 2021, reaching their highest level since 2006. In that year, 6.1 million homes were sold, up from 5.6 million in 2020. According to the prediction, sales will likely dip in 2022 before increasing again in 2023.

#4. Americans have over $21.1 trillion in homeowner equity.

The value of homeowner equity in the United States increased from approximately 8.77 trillion U.S. dollars in 2010 to approximately 21.1 trillion U.S. dollars in 2020.

#5. Total mortgages in 2021 amounted to $17.6 trillion. 

Despite a brief drop following the bursting of the US housing bubble and the global financial crisis, the overall amount of mortgage debt in the US has been rising in recent years. Mortgage debt increased to 17.6 trillion dollars in 2021, up from 16.8 trillion dollars in 2020.

#6. The total number of mortgages in the US is in the millions. 

It isn’t easy to come up with a precise figure. According to current data on the US mortgage market, 22.7 million home loan applications were submitted in 2020, with 14.5 million of those resulting in loan originations.

#7. A married couple represents the average US home buyer.

Mortgage sector statistics reflect the facts: Married couple represents 62 percent of individuals who buy a home, followed by single females (18 percent). Single men make up only 9% of buyers, as do unmarried couples. The remaining 2% of homeowners do not fit into any previous three categories.

#8. The median credit score among new mortgage borrowers is 781.

The average credit score for mortgage borrowerswas 781 in the third quarter, down from 786 in the second quarter and just shy of the record high of 788 in the first quarter. In contrast, during the era of permissive lending that contributed to the Great Recession, the median credit score of mortgage borrowers dropped as low as 707.

#9. In 2020, millennials accounted for 61% of home-purchase mortgages.

The most significant achievement is that millennials now account for more than half of all mortgages for home purchases. According to Ellie Mae’s research, that figure increased to 61 percent in July 2020, a 5 percent increase from the previous month.

#10. 61% of new mortgage borrowers used an online application to apply for a loan.

Mortgage statistics over the years have demonstrated the importance of the internet in the mortgage market. Aside from applying for a home loan online, 61 percent of 2020 applicants used internet portals to sign all required paperwork electronically.

#11. The median housing cost across the country is $1,609.

According to the U.S. Census Bureau, the median monthly mortgage paymentis just over $1,600. However, the average housing cost varies across states depending on the mortgage program.

#12. The average US mortgage interest rate is 4.16%.

According to Freddie Mac, the average rate on a 30-year fixed-rate mortgagejumped to 4.16% this week. That’s a massive 0.31 percentage point increase from last week’s average and the first time the average 30-year rate has been above 4% since May of 2019.

#13. The mortgage delinquency rate in the US by at least 30 days or more stands at 4%.

The delinquency rate is the mortgage debt indicator that best indicates the economy’s continuous recovery. The rate reached an all-time high of 11.54 percent in January 2010. Since then, it has been steadily declining, and it is presently at an all-time low. In 2021, it fell by 2.6 percent from 6.6 percent in August 2020.

#14. In 2021, just 30% of homebuyers paid their home in full without any debt.

Nearly one-third (30%) of U.S. home purchases were paid for with all cash this year. That’s up from 25.3% during all of 2020 and represents the largest share since 2014 when 30.6% of homes were purchased with all cash.

#15. 65.5% of Americans are homeowners.

The homeownership rate in the United States amounted to 65.5 percent in 2021. The homeownership rate is the proportion of occupied households occupied by the owners.

#16. 43,000 reverse mortgages were taken out in 2020. 

Reverse mortgage loans allow homeowners to convert their home equity into cash income with no monthly mortgage payments. Over the last few years, there was a 34% increase in reverse mortgage volume to over 43,000 loans in 2020, and experts anticipate a similar increase in production in 2021.

#17. 15 percent of home buyers found the home-buying process to be hard

15 percent of home buyers found understanding the home-buying process to be the hardest home-buying step (third hardest overall), while 7 percent of home buyers said securing a mortgage was the hardest home-buying step (fifth hardest overall).

#18. In 2020, GSE mortgage investors originated 59.2 percent of the total market volume.

In 2020, GSE mortgage investors, such as Freddie Mac and Fannie Mae, originated 59.2 percent of total market volume. Portfolio originations, including jumbo loans, accounted for 21.5 percent of the market volume, followed by FHA and VA investors at 18.4 percent and private lenders at 0.9 percent.

#19. First-time home buyers rose to 2.38 million in 2020

For the full year, 2.38 million Americans became first-time homebuyers, which is 14 percent higher than the same period a year ago. This comes after three years of strong first-time homebuyer market activity when the number exceeded 2 million each year.

#20. 61 percent of buyers used personal savings to pay for their downpayment

For most home buyers, the purchase of real estate is one of the largest financial transactions they will make. For 61% of buyers, the source of the downpayment came from their savings. 56% of buyers cited using the proceeds from the sale of a primary residence, while 28% of first-time buyers used a gift or loan from friends or family for the downpayment.

#21. First-time home buyers typically finance 93 percent of their home

First-time buyers who financed their home typically financed 93% of their home compared to repeat buyers at 83%. Since most first-time home buyerfinds it difficult to save for a downpayment, it is common for them to request more financing support.

#22. Home Improvement loans declined in 2020 compared to the previous year

The number of home improvement loans secured by dwellings declined significantly from 174,000 in 2019 to 142,000 in 2020. According to most mortgage experts, this decline was due to the coronavirus pandemic and fear of a potential economic recession.

#23. Black and Hispanic white borrowers had notably higher denial rates in 2020

Among home-purchase applications, the overall denial rates were 18.1 percent for Black applicants and 12.5 percent for Hispanic white applicants in 2020, which were higher than those in 2019. In contrast, the overall denial rates of home-purchase applications were 9.7 percent for Asian applicants and 6.9 percent for non-Hispanic white applicants.

#24. Black and Hispanic white borrowers continued to pay higher median interest rates

At 3.250 percent, Black and Hispanic borrowers continued to pay higher median interest rates than other racial/ethnic groups for home-purchase loans. The median interest rate for Asian home-purchase borrowers was 3.0 percent in 2020, and the median interest rate for non-Hispanic white home-purchase borrowers was 3.125 percent.

#25. The overall denial rate for home-purchase applications for all applicants was 9.3 percent

The overall denial rate for home-purchase applications for all applicants was 9.3 percent in 2020, higher than that in 2019 (8.9 percent) but lower than that in 2018 (9.8 percent). About 14.1 percent of FHA applications (excluding withdrawn or incomplete applications) for home-purchase loans were denied in 2020, followed by applications for jumbo loans with a denial rate of 11 percent. The conventional conforming home-purchase applications had a denial rate of 7.6 percent in 2020, the lowest among all enhanced loan types.

#26. Denial rates for refinance applications were higher than those for home-purchase loans in 2020

The overall denial rate on applications for refinancing loans was 13.2 percent in 2020, 6 percentage points lower than in 2019 and less than half of the denial rate (29.1 percent) in 2018. Consistent with home-purchase applications, applications for FHA refinance loans were more likely to be denied (22.2 percent) than all other enhanced loan types, while applications for conventional conforming refinance loans were the least likely to be denied (12.0 percent).

#27. Credit scores under 600 made up 0.1% of the total new mortgages

For those with a credit score under 600, their share of the total new mortgages was only 0.1% in 2020. This is most likely due to the minimum requirement set by most mortgage programs.

#28. Forbearance rate hit 7.2 million in 2020

At the height of the pandemic, more than 7.2 million homeowners were in the mortgage forbearance program, which allows some borrowers to pause their payments. The economy has since posted one of the fastest recoveries in history. Now, just 1.7 million borrowers are enrolled in the forbearance program in 2021.

#29. 69% of homebuyers would prefer to handle their mortgages entirely online. 

Technology is changing the way the mortgage industry operates. Accustomed to a digital world, 69 percent of homebuyers expect faster services, and that’s what fintech solutions deliver. Still, most say they would prefer to be in touch with a human for the most critical steps in the process.

#30. Independent mortgage lenders account for 68.1% of all mortgages in 2020.

Independent, nonbank mortgage lenders accounted for more than 68.1% of all mortgages originated in 2020 compared to 58.9% in 2019, according to data from Inside Mortgage Finance.

#31. Differences in homeownership rates for whites and African Americans increased by 29.6 percent in 2021

In 1994, homeownership rates for whites and African Americans were 70 percent and 41 percent, respectively — a 28.8 percent gap. By 2021, that gap had increased to 29.6 percent (74.2% vs. 44.6%).

#32. 38 percent of non-homeowners say down payment savings is their primary obstacle

38 percent of non-homeowners say down payment savings is their primary obstacle in buying a home, followed by their credit score (32 percent). FHA and VA loans provide opportunities for buyers with small down payments or low credit scores.

Will Rising Rates Hurt the Mortgage Industry?

Yes, a significant increase in mortgage rates would cause two major problems for the housing market. First, it would make it more difficult for people hoping to buy their first homes at current prices; and second, it would make it difficult for existing homeowners now paying low rates to move because doing so would mean giving up a lower interest rate for a higher one.

How Many Mortgages Are There in the United States?

The actual number of mortgages in the United States is difficult to calculate, although current ownership rates stand at 63 percent. There were 375 million mortgage originations, and 230 million refinance originations from 2012 to the third quarter of 2019.

What Is the Average Life of a Mortgage Loan?

In the United States, the most frequent mortgage length is 30 years. A 30-year mortgage provides the borrower with 30 years to repay their loan. The majority of people who have this form of mortgage will not keep the initial loan for 30 years. The average mortgage term, or mortgage lifespan, is less than ten years.

Bottom Line: Mortgage Statistics

Mortgages are a complex component of finance that is influenced by various events taking place in the United States and throughout the world. While the previous crisis impacted the housing industry, things are looking brighter with more homeowners and first-time purchasers among Millennials. Understanding the most recent mortgage statistics provides useful insights into the state of the housing industry and the US economy in general.

Sources:

Elijah Bishop
Elijah Bishop

Elijah A. Bishop is a Senior Personal Finance Writer who has been writing about real estate and mortgages for years. He has a Bachelors of Arts Degree in Creative writing from Georgia State University and has also attended the Climer School of Real Estate. He also holds a realtor license and has been in and out of the US mortgage industry as a loan officer. Bringing over 15 years of experience, Elijah produces content that analyzes ethnicities, race, and financial well-being. His areas of expertise are mortgages, real estate, and personal loans.