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U.S. Mortgage Market Statistics: 2019

While interest rates have fallen considerably over the past year, homeownership rates are still lower than they were in the 10-year period before the Great Recession of 2007 to 2009. This is due, in large part, to home prices continuing to stay hot throughout 2019. 

Fortunately, there are still many ways to make your mortgage more affordable. For example, homebuyers can lessen the blow of rising home prices by shopping around for a mortgage to find their best rate offer before they buy. Those who already own a home can also save by refinancing their current mortgage to a lower rate. 

Read on to find a variety of housing metrics to understand the current state of the housing market, who gets home financing, how mortgages are structured and how Americans are managing debt.

Summary

  • Total mortgage debt: $10.5 trillion1
  • Average mortgage balance: $148,9842
  • Average new mortgage balance: $258,1493
  • Homeownership rate (share of owner-occupied homes): 64.8%4
  • Homeowners with a mortgage: 62%5
  • Median credit score for a new mortgage: 7656
  • Average down payment made: $13,5877
  • Mortgages originated in 2018: $1.63 trillion8
  • Share of mortgages originated by nonbank lenders: 67%11
  • Share of refinance loans originated by nonbanks: 74%11
  • Share of mortgages with a delinquency rate of 30 days or more: 2.5%14

Homeownership and equity levels

In the second quarter of 2017, real estate values in the United States surpassed their pre-housing-crisis levels and have continued to increase.13 As of the third quarter of 2019, the total value of real estate owned by individuals in the United States is nearly $29.2 trillion.13 Total mortgages clock in at $10.5 trillion.1 This means that Americans have $18.7 trillion in home equity.12

Although Americans have a large amount of home equity, real estate wealth is becoming increasingly concentrated as overall homeownership rates fall. In 2004, 69% of all Americans owned homes. Today, that number is down to 64.8%.4  

New mortgage originations

Mortgage origination levels have recovered from their housing crisis lows. In 2008, financial institutions only issued about $1.4 trillion of new mortgages, but by 2016, new first-lien mortgages topped $2 trillion8. Though that number has since fallen, new first-lien mortgages were still at $1.6 trillion in 2018, ahead of where they were in 2008.8

In 2010, three banks (Wells Fargo, Bank of America and Chase) originated 56% of all mortgages.10 However, since 2010 the number of mortgages originated by nonbanks has increased, and nonbanks now originate the majority of mortgage loans.11 One key reason for this is that nonbanks usually have more lenient lending standards and appeal to borrowers looking for more flexible requirements. As a result, they’ve been able to carve out a significant slice of share in the purchase and refinance lending markets. 

Government vs. private securitization

Government-sponsored enterprises (GSEs) have traditionally played an important role in ensuring that banks have enough capital to issue new mortgages. Through the first half of 2019, GSEs Fannie Mae and Freddie Mac purchased 38.6% of all newly issued mortgages, down from 43.9% in the first half of 2018.8

Through the first half of 2019, private securitization companies purchased only 2.1% of all loans, slightly higher than the 2.0% purchased through the same time period in 2018.8

As private securitization firms exited the mortgage landscape, programs from the Federal Housing Administration (FHA) and U.S. Department of Veterans Affairs (VA) have filled in some of the gap. FHA and VA loans can help borrowers get loans despite having smaller down payments or lower incomes. FHA and VA loans accounted for 18.7% of all loans issued in the first half of 2019, down from 21.9% in the first half of 2018.8 

Portfolio loans — mortgages held by banks — accounted for $370 billion in new home loans through the first half of 201911. This represents a 40.2% share of first-lien originations in the first half of 2019, up from 32.3% in the same period the previous year.8

Mortgage credit characteristics

As of November 2019, the median FICO score for an originated mortgage was 765. This is up nearly 60 points from the pre-crisis median of 707 in late 2006.6

The growth in these scores has led of more mortgages originated for borrowers with credit scores of 760 and above since the financial crisis. For example, as of the first quarter of 2019, around half of all mortgages originated were for borrowers with credit scores in this range. Before the crisis, a majority of mortgages were originated for those with credit scores between 660 and 759.6  

From the first quarter of 2003 through the end of 2008, an average of 20% of all mortgages originated went to people with subprime credit scores (lower than 660). In the third quarter of 2019, subprime borrowers received just 8% of all mortgages.6 

Meanwhile, the share of mortgages issued to borrowers with excellent credit (scores above 760) more than doubled. Between the third quarter of 2001 and the end of 2008, just 28% of all mortgages went to people with excellent credit. In the third quarter of 2019, 61% of all mortgages went to people with excellent credit.6

Although banks tightened their lending standards for maximum debt-to-income (DTI) ratios after the housing collapse of 2008, they’ve recently started loosening those standards. For example, though their maximum DTI ratio is usually capped at 36% of a borrower’s monthly income, Fannie Mae currently allows some borrowers to go up to 50% DTI in some cases.

As of 2018, the average DTI ratio from Freddie Mac and Fannie Mae of 36.8%, was more than one point higher than the average DTI ratio in 2017, 35.5%. Nonetheless, the average DTI ratio is still lower than it was in 2007 (38.4%).15 

Loan-to-value ratio and delinquency trends

Banks continue to screen customers on the basis of credit score and income, but mortgage borrowers are taking on bigger loans than ever before. As of 2018, a new mortgage has an average unpaid balance of $258,149 according to data from the Consumer Financial Protection Bureau.3

The primary driver behind larger loan amounts are higher home prices, but lower down payments also play a key role. As of the third quarter of 2019, the median loan-to-value ratio (LTV) at loan origination was 95%, while the average was around 87%.11 In the years leading up to the financial crisis, from 2000 to 2007, that number was closer to 80% for the median and between 80% and 85% for the average.11

As of the second quarter of 2019, the LTV ratio across all homes in the United States is an estimated 36%. The average LTV on mortgaged homes is 58%.12 

Americans continue to manage their mortgage debt well. Current homeowners have annual mortgage payments that make up an average of just 18.3% of their annual household income.2

In the third quarter of 2019, mortgage delinquency rates were 2.45% — well below the 2010 peak of 11.5%.14

Mortgage debt service payments as a percentage of disposable personal income have fallen to 4.1%, their lowest levels since 1980 when the data was first recorded.16

LendingTree research analyst Jacob Channel contributed to this report.

Sources:

  1. Board of Governors of the Federal Reserve System (U.S.), Households and Nonprofit Organizations; Home Mortgages; Liability, Level [HHMSDODNS], retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/HHMSDODNS Accessed Jan 7, 2020.
  2. Survey of Consumer Expectations Housing Survey – 2019,” From the Federal Reserve Bank of New York. Pg. 62. Accessed Jan 7, 2020
  3. Home Mortgage Disclosure Act, Consumer Financial Protection Bureau. https://ffiec.cfpb.gov/data-browser/data/2018?category=nationwide&loan_types=&actions_taken=1&getDetails=1  Accessed Jan 7, 2020.(Calculated by dividing total # of records for originated loans by total $ amount for originated loans). 
  4. U.S. Census, Homeownership Rate for the United States [USHOWN], retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/RHORUSQ156N, Accessed Jan 7, 2020. (Calculated as a percentage of all housing units occupied by an owner occupant.)
  5. “U.S. Census Bureau, 2018 American Community Survey 1-Year Estimates,” Mortgage Status, Owner-Occupied Housing Units. Accessed Jan 7, 2020.
  6. Quarterly Report on Household Debt and Credit November 2019.” Credit Score at Origination: Mortgages, from the Federal Reserve Bank of New York and Equifax Consumer Credit Panel. Pgs. 8 & 11. Accessed Jan 7, 2020. Additional data can be found by downloading the “Data Underlying Report” excel file here: https://www.newyorkfed.org/microeconomics/databank.html 
  7. Calculated metric:
    1. Down Payment Value = Home Price* Average Down Payment Amount (Average Unpaid Balance on a New Mortgage / Median LTV on a New Loan) * (1 – Median LTV on a New Loan)
    2. Home Mortgage Disclosure Act, Consumer Financial Protection Bureau, https://ffiec.cfpb.gov/data-browser/data/2018?category=nationwide&loan_types=&actions_taken=1&getDetails=1 ”Gives an average unpaid principal balance on a new loan =$258,149. Accessed Jan 7, 2020
    3. Housing Finance at a Glance: A Monthly Chartbook, November 2019.” Page 15, Median Combined LTV at Origination from the Urban Institute, Urban Institute, calculated from: Corelogic, eMBS, HMDA, SIFMA, and the Urban Institute. Data provided by Urban Institute Housing Finance Policy Center Staff. Gives median LTV on a new loan of 95%. Accessed Jan 7, 2020
  8. Housing Finance at a Glance: A Monthly Chartbook, April 2019.” Page 8, First Lien Origination Volume from the Urban Institute. Source: Inside Mortgage Finance and the Urban Institute. Data provided by Urban Institute Housing Finance Policy Center Staff. Accessed Jan 7, 2020
  9. Calculated Metric: Value of U.S. Real Estate – Mortgage Debt Held by Individuals
    1. Board of Governors of the Federal Reserve System (U.S.), Households; Owner-Occupied Real Estate including Vacant Land and Mobile Homes at Market Value [HOOREVLMHMV], retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/HOOREVLMHMV, Accessed Jan 7, 2020.
  10. Mortgage Daily, 2017. “3 Biggest Lenders Close over Half of U.S. Mortgages” [Press Release]. Retrieved from http://www.mortgagedaily.com/PressRelease021511.asp?spcode=chronicle. Accessed Jan 7, 2020
  11. Housing Finance at a Glance: A Monthly Chartbook, November 2019” From the Urban Institute, Pages 6, 7, 8, 11 & 15 Calculated from: Corelogic and the Urban Institute. Data provided by Urban Institute Housing Finance Policy Center Staff. Accessed Jan 7, 2020
  12. Calculated metrics:
    1. Mortgages Houses LTV = Value of All Mortgages / (Value of All Homes – Value of Homes with No Mortgage)
    2. Board of Governors of the Federal Reserve System (U.S.), Households; Owner-Occupied Real Estate including Vacant Land and Mobile Homes at Market Value [HOOREVLMHMV], retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/HOOREVLMHMV, Accessed Jan 7, 2020
    3. Board of Governors of the Federal Reserve System (U.S.), Households and Nonprofit Organizations; Home Mortgages; Liability, Level [HHMSDODNS], retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/HHMSDODNS, Accessed Jan 7, 2020
    4. U.S. Census Bureau, 2018 American Community Survey 1-Year Estimates, Aggregate Value (Dollars) by Mortgage Status, Accessed Jan 7, 2020
  13. Board of Governors of the Federal Reserve System (U.S.),  Households; Owner-Occupied Real Estate including Vacant Land and Mobile Homes at Market Value [HOOREVLMHMV], retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/HOOREVLMHMV, Accessed Jan 7, 2020
  14. Board of Governors of the Federal Reserve System (U.S.),  Delinquency Rate on Single-Family Residential Mortgages, Booked in Domestic Offices, All Commercial Banks [DRSFRMACBS], retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/DRSFRMACBS, Accessed Jan 7, 2020
  15. Single Family Loan-Level Dataset Summary Statistics November 2019” & “Fannie Mae Statistical Summary Tables October 2019” From Freddie Mac and Fannie Mae. Pg. 3 & Pg. 1. (Calculated by combining data from both reports to generate a single number for the year). Accessed Jan 7, 2020
  16. Board of Governors of the Federal Reserve System (U.S.), Mortgage Debt Service Payments as a Percent of Disposable Personal Income [MDSP], retrieved from FRED, Federal Reserve Bank of St. Louis;https://fred.stlouisfed.org/series/MDSP, Accessed Jan 7, 2020

 

 

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