Are you thinking of buying a house and taking on a mortgage? We’ll make your situation a little bit easier by giving you all the info on the topic in our 25+ important mortgage statistics for future homeowners!
We all know that in these unpredictable times, it’s no surprise that many people are hesitant to apply for a loan they will be paying out for years.
Thankfully, you are not on your own!
The latest market trends and data gives us a clearer picture on home-owning in America. Check out what the newest facts have to say
Current Mortgage Facts & Info (Editor’s Picks)
- The average monthly mortgage payment is $1487
- The average American mortgage debt is around $208,000
- In most U.S. states, mortgage debt increased by around 2% in 2020
- 79% fewer properties entered foreclosure in late 2020
- First-time buyers made up 33% of all American home purchases in 2019
- An average first-time buyer in the U.S. is 34 years old
- The average house price in the U.S. in 2020 was around $380,000
- Every dollar lost in mortgage fraud costs lenders $3.5
Basic Mortgage Stats
1. The Average Mortgage Payment is $1487 per Month
(USA Today, Business Insider)
The payment depends on multiple factors, such as your initial down-payment and the number of years the mortgage will span over. For a 15-year fixed mortgage, the average payment in America is $1,751, compared to a 30-year mortgage; however, the payment is lowered to $1,275 per month.
2. The Average American Mortgage debt is around $208,000
According to national estimates, mortgage debt is among the largest of all consumer debts, with almost half (44%) of Americans currently in the process of paying off their mortgage.
An additional 12% have home equity loans (essentially a “second” mortgage), averaging around $41,954.
3. The Mortgage Market Was Worth $11 Trillion in 2020
Home loan data indicates that there were over 6 million home sales in 2020. Out of that, over 700,000 were newly constructed properties.
The mid-point cost of one of these homes is $326,200, signaling that the price of purchasing a home is rising, even after the complications of the pandemic in 2020.
4. Mortgage Applications in the U.S. Dropped Almost 5% in April of 2021
Despite the fact that the economy is recovering, mortgage applications data show a significant monthly drop in the number of mortgage applications. Experts blame the fast growth of home prices, low inventory of purchasable houses, and barriers to faster construction methods for the drop.
5. In 2020, Mortgage Debt Increased by an Average of 2%
The year 2020 showed that citizens are more interested then in buying homes than ever before, although they do seem to be applying for more money.
In Idaho, the mortgage debt increased by 8.3%, with Nevada, Utah, Tennessee, and Colorado running up close behind it. In contrast, places like Connecticut rose by only 0.3%. These home buying statistics suggest that areas that were hit hardest economically by the pandemic are asking for bigger loans to compensate for the rise in housing costs.
6. Purchase Loan Mortgage Originations Totaled $348 Billion in 2020
Mortgage origination is a standard part of the mortgage loan process, in which a borrower and a lender work together to achieve either a purchase loan or a refinance loan.
A purchase loan is where the buyer takes out a loan to pay for a house. A refinance loan is when the borrower takes a loan out based on their home’s equity, usually making mortgage payments lower.
Mortgage originations statistics show that refinancing is becoming popular again after a six-year declining period. In 2020, it added up to $580 billion, more than $150 billion more than purchase loans.
7. 79% Fewer Properties Entered Foreclosure in Late 2020.
The year 2020 showed a decrease in the number of foreclosures compared to 2019. However, despite that decrease, national foreclosure statistics show an increase in numbers in recent months. For instance, in October of 2020, over 20% more properties entered the foreclosure process than in the month before.
These trends run in tandem with the pandemic, as locations with high unemployment rates and high COVID-19 outbreaks had the highest rates of foreclosure.
8. With More Than 1.1 Million Loans in 2020, Quicken Loans is the Biggest Mortgage Lender in the U.S.
Quicken Loans is the company with the largest mortgage market share in the United States. In 2020, it offered over half a million more loans than the second-largest lender: United Shore Financial. Other big mortgage companies are Wells Fargo, JPMorgan Chase, and LoanDepot.
9. With over 162,000 loans in 2020, Wells Fargo is the biggest reverse mortgage company in the U.S.
A reverse mortgage is offered to homeowners who are 62 years old or older. Reverse mortgage statistics show that the loan, based on the home’s equity, is usually around 80% of the property value.
Interestingly, the loan is only repaid when the person moves out of the property or passes away. By this time, they likely owe more than they borrowed due to the fees and interest charges. The selling of the property usually repays these loans.
Mortgage Data on Rates
It can all be a lot to take in. There seem to be so many factors, terms, and calculations when trying to understand mortgages and whether they are the right decision for you.
To determine whether it’s a good time to invest in such a huge commitment, knowing what rates mean, why they go up and down, and generally understanding mortgage industry trends can be a great advantage in planning your financial future.
10. In January 2021, Mortgage Rates in the United States Dropped to 2.6%
(The Mortgage Reports)
Mortgage rates have been steadily declining since the beginning of 2020, perhaps explaining why mortgage loan applications were hardly affected by the pandemic. Many jump at the chance to secure a low mortgage rate, but that might not be a great idea if you aren’t actually ready.
Don’t be another number in all the foreclosure stats just because rates are low. There are many factors that contribute to it being the right time to buy. While mortgage rates hit an all-time low of 2.6% in January, experts say that the rate should stay around 3% for the next few years.
11. The Mortgage Bankers Association Predicts That Mortgage Rates Will Reach 3.6% by the End of 2021
(The Mortgage Reports)
Analyzing the mortgage interest rate trends for 2021 and listening to experts’ opinions, it does seem that mortgage rates are beginning to rise again. Whether it will be a rapid increase or a gradual one, it kind of all depends on whether Americans continue to be able to save money and buy houses.
12. The Foreclosure Rate for 2020 in the U.S. Was the Lowest to Date at 0.16%
The foreclosure rate is one of the more surprising mortgage facts for the year of 2020, considering the economic instability caused by the COVID-19 outbreak. Foreclosure happens when a homeowner cannot pay their mortgage payments, and the bank repossesses the property.
The highest number of foreclosures occurred after the stock market crash in 2008 and 2009 at 2.2%.
With millions of Americans losing their jobs over 2020, however, Americans were given a chance to be reliable to their bill payments more than ever, with special federal aid for mortgage payments and other necessities given out.
Home Ownership Statistics
Knowing how many other people are thinking about or buying houses right now can be a helpful way to inform your own decision. Knowing more about them, like who they are, how much money they make, and how much they spend on a house can show you possibilities that may also work for you.
13. American First-Time Buyers Made Up 33% of All Home Purchases in 2019
First-time homebuyer statistics show that, in recent years, the share of first-time buyers has remained relatively static, hovering between 30%-33%. The largest share was marked in 2010 at 50% due to a small economic boom after the recovery from the Financial Crisis.
14. The Average First-Time Buyer in the U.S. is 34 Years Old
The thirties are when most people decide to buy their first home. For this generation, that means that millennials are in the hot seat when it comes to buying a home. Since millennials entered the average age to buy a house, the percentage of first-time home-buyers dropped by nine percent!
Millennials have been observed, however, to readily delay buying a home, as they are more likely to be unmarried, be drenched in student-loan repayments, and still living at home with their parents.
15. New York is the 10th Most Expensive Property Market in the World
The most expensive residential property market in the world is Hong Kong, according to the latest housing market stats. Munich comes in second while Singapore is the third most expensive market. Other markets that made it to the top ten of this list are Shanghai, Shenzhen, Beijing, Vancouver, Los Angeles, and Paris.
16. The Average House Price in the U.S. in 2020 Was Around $380,000
The national average house price in the U.S. has been slowly increasing since 2011. In the last five years, the average price fluctuates from $360,000 to $380,000.
17. Over 60% of People in the U.S. Believed that the End of 2019 Was A Good Year To Buy a Home
NAR statistics from January 2020 reported that 35% of those surveyed did not believe that the end of 2019 was a good time for such a big purchase. The majority of people that were not ready to buy a new home were renters and Millenials.
18. 57% of Non-Homeowners Believe It Would Be Difficult to Qualify for a Mortgage
Mortgage statistics by NAR also show that 75% of people who earn under $50,000 a year believe they wouldn’t be able to qualify for a mortgage. The same opinion is held by 26% of those earning up to $100,000 a year.
19. Multifamily Buyers Have To Put At Least 25% of the Buying Price Down To Get Approval for the Mortgage
A multifamily mortgage involves acquiring a mortgage for a property designed for more than one family, such as townhouses, apartments, and small complexes.
Multifamily mortgage rates run a bit higher than regular single-family dwellings and must additionally provide more requirements to receive this kind of mortgage. In most cases, the buyer needs to have a thorough plan for the purpose of the building, how many units it is expected to have, how they will be filled, how much tenants will pay, and community support.
Home Buyer Demographics
There are multiple factors that go into understanding who is a homeowner and also why. For example, in 2020, approximately 38% of all home buyers were between 30 and 40 years of age and are often first-time buyers. Baby boomers, however, also made up around 30%, with many of them being experienced buyers.
By understanding things like the average mortgage debt by age, race, and economic status, you can understand further when might be the right time for you to take that big step (if ever) into life-long debt.
Things like credit scores, other forms of debt, and in general, life readiness play an immense factor in who is both eligible and interested in obtaining a mortgage.
20. 56% of Millennials in the U.S. think they wouldn’t be able to qualify for a mortgage.
One of the millennial home buying statistics of interest is the number of them who think it will be difficult to get a mortgage. Almost 30% of millennials believe it would be very difficult to qualify for a mortgage loan, while 27% rated their financial situation as “somewhat difficult.”
21. Generation X has the highest mortgage debt in the U.S: $247,564
The average debt for Gen Z was $169,470 in 2020. While millennials owed $237,349 and baby boomer’s average debt was $178,688. To understand this trend, perhaps it just needs to be considered what life stage each generation is in.
Mortgage rate statistics suggest that most mortgages are paid off over 30 years, so Generation X is right in the middle of their debt, while most millennials and Gen Z-ers haven’t even bought a home yet.
22. Baby Boomers Have the Highest Credit Score in the U.S: 736
Credibility has genuinely become one of the sole indicators of whether you can make any significant purchases in the world today. It is based on the ability to acquire debt and pay it off on time, the income and employment you have, and many other factors.
Credit score demographics can tell us a lot about what it means to be credible. For example, the average Gen Z-er has a credit score of 674, six less than Millennials, and the average score for Gen X is 699. This linear relationship suggests that if you haven’t lived long enough to show you are responsible, it will be that much harder to participate in the housing market.
Mortgage discrimination statistics show that while discrimination in loans is decreasing, it still exists and continues to pose a problem to future homeowners. Researchers working on these issues found that black and Latino buyers were charged with more considerable refinancing fees.
Racial discrimination was discovered, especially through comparing online and in-person applications. Buyers that applied online were offered better terms than when they applied in person.
Mortgage Fraud Statistics
Mortgage fraud is the use of deception or misrepresentation of any kind to gain a mortgage loan or gain a loan of greater value than if the deception hadn’t occurred. In most cases, potential buyers give false information or leave out crucial data about themselves to meet requirements.
24. Mortgage Companies Reported 1,316 Incidents of Fraud per Month in 2020
(National Mortgage News)
Mortgage statistics tell us that, every month, mortgage companies reported more than 1300 incidents of fraud. The situation was even worse for the digital lenders, with around 500 more reports every month.
25. 55% of Fraud Attempts in 2020 Were Successful
(National Mortgage News)
Data also shows that fraud attempts in 2020 were more successful than the ones in the year before. In 2019, only 36% of fraudsters were successful. When it comes to digital lenders, 53% in 2020 and 22% in 2019 were successful.
26. Every Dollar Lost in Fraud Costs Lenders $3.50
(National Mortgage News)
One of the most interesting mortgage facts about fraud is that mortgage lenders believe identity verification presents the biggest challenge in online fraud prevention. Email, phone, and address verifications posed a major customer convenience problem, with over 35% of lenders claiming they found them difficult or couldn’t be verified online.
Fraud schemes and scams are constantly evolving, so significant preparation in online applications must be considered to protect your personal information.
Final Thoughts on Mortgage Stats
It’s challenging to paint the mortgage market picture in just one article, and if you are considering buying a house, there are many different things to take into account.
These facts and stats give the baseline to begin your journey in following the housing market and keeping informed about common trends.
Even if you’re passing the average age to buy a house, taking your time and being patient will help you make the right choice when you do decide you want to apply for a loan.
People Also Ask
The average life of a mortgage loan depends on numerous factors so it’s difficult to know for sure. Some experts estimate that its average life is only 3 to 5 years, but 5 to 7 years was the norm in past years. Due to the rising rates, unpredictable housing market, and many other factors, many people choose to stay in their houses for longer than predicted.
Years ago, lenders would calculate the mortgage by multiplying a borrower’s annual salary by 4 or 5. However, that’s not the case in today’s market. Lenders take into account various data and use complex algorithms to verify a borrower’s ability to pay out their loan. The Office of National Statistics came out with a guide on expected commitments and salary expectations, which also goes into the calculation.
The statistics tell us that the average American mortgage debt is a bit over $200,000. According to some estimates, Gen Z, which includes homebuyers of 24 or younger, has a lower debt which sits at around $170,000. On the other hand, people aged 25 to 40 have debt above the average sum.
Looking at the statistics, it is evident that for most people taking out a mortgage loan is pretty close to their opportunity cost. A mortgage is not a bad idea for a majority of homebuyers. Depending on your income, employment stability, and personal needs, a mortgage should be carefully considered as it can stay with you for a long period of time.
Some experts even have a theory that mortgages, in general, are not the best idea since they increase the prices of homes. If no one could purchase a house at a specific price point without the help of a loan, house prices would go down.
Mortgage statistics tell us that 44% of the American population already has a mortgage. Unfortunately, we can’t tell you the exact number of people that own a home and are paying off the mortgage, but research shows that around 60% of homeowners have a mortgage. Therefore, about 40% of owners have either bought their houses without loans or managed to pay out their mortgages.