Essential Mortgage Statistics to Be Aware Of

Becoming a homeowner is essential to the American Dream. Your house is more than a place to live. Owning a home is the tangible culmination of years of hard work.

It was once common to accumulate sufficient savings to pay cash for a home, but stagnant wages and rising real estate prices have made that impractical for nearly all Americans.

That is where mortgages come in.

A mortgage is probably the biggest loan you’ll ever take out. So take a hard look at the statistics and trends on this page. As a prospective homeowner, you need to be as informed as you can be.

Although most segments of the economy have recovered since the Great Recession of 2008, the mortgage industry is still grappling with changes. Nowhere is this more evident than in the rising influence of nonbank mortgage lenders.

Big deposit-taking banks have seen a significant drop in their share of mortgage originations, while independent mortgage lenders have been resurrected.

These big and small nonbanks have increased market share, catapulting themselves to the very top of the industry and bringing change on an unprecedented level.

Essential Statistics About Mortgages for 2024 - Editor’s Choice

• Percentage of homeowners with mortgages: 63.
• Number of homes sold in the United States each year: more than 6.5 million.
• Current American mortgage debt: $16.96 trillion.
• Portion of homes purchased with mortgages as opposed to cash in 2018: 78%.
• Total American homeowner equity: $21.1 trillion.
• The average US interest mortgage rate: 3.1%.
• Percentage of online applicants who prioritize fewer in-person interactions: 49%.

The average mortgage balance in the United States in 2020 was $208,185. 

(Experian)

During 2020, despite the COVID-19 pandemic, mortgage debt increased 2% compared to 2019. Americans continued to buy homes, as many were further motivated by a drop in interest rates. 

63% of homeowners in the US have mortgages. 

(US Census Bureau)

For most Americans, buying a new house with cash is not an option - especially a first house. It would take decades to amass that amount of money. That’s why all statistics indicate that, for young people especially, mortgages are the only reasonable path to homeownership.

By the end of 2020, the US housing market was worth $36.2 trillion in real estate. 

(Zillow Research)

Despite the COVID-19 pandemic, the housing market increased by $2.5 trillion. Appreciation of existing homes accounts for $2.2 trillion, while newly constructed ones account for $274 billion. This is a new record-breaking annual increase since 2005. 

65.4% of Americans are homeowners.

(US Census Bureau)

The data highlights the ongoing concentration of real estate wealth among fewer owners as well as the tightening of credit standards following the Great Recession. Consumer doubt is also a factor: Some people are still wary of going into debt after the last banking crisis.

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

(SmartAsset)

Finance experts and mortgage lenders have always recommended that you make a down payment that’s worth 20% of your new home’s purchase price. This advice has morphed from realistic to aspirational in modern real estate circles. Many homes are now purchased with 1% down payments. Rising home prices are a big factor, and as a result, there is no sign that this trend will reverse any time soon.

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

(Statista)

Statistics show a steady increase in both new and existing houses sold in the US since 2011. In that year, the total number of house sales was 4.57 million, and 2022 projections suggest a total of 6.7. That is a 46.% increase in a decade. It signals the recovery of the country’s economy since the global financial crisis ended in 2009.

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

(The Wall Street Journal)

The transition has led to a resurrection of independent lending companies. From 9% market share in 2009, these nonbanks have come to dominate the mortgage market in 2019, and in 2020, nearly two-thirds of all mortgages came from them. The largest independent lender is Quicken Loans.

Total mortgages in Q1 2021 amounted to $16.96 trillion. 

(Statista)

While a big increase in total mortgage debt may seem like a bad thing, it’s in fact a sign of a recovering economy. For years, mortgage debts showed a fall due to industry stagnation after 2008’s financial meltdown. Rising mortgage debt, especially on new mortgage loans, indicates that the economy is finally recovering and that people increasingly believe it’s safe to invest in a house.

Americans have over $21.1 trillion in homeowner equity.

(Statista)

Because real estate holdings have risen to a total value of $25.6 trillion, Americans now have the highest level of equity in the nation’s history. For reference, the previous record was set in 2005, when total home value hit $14.42 trillion before collapsing in the financial crisis. This time, the economy is much more stable and the rise of equity promises more security for homeowners.

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

(CoreLogic)

In January 2010, the rate hit an all-time high of 11.54%. It has been dropping ever since, and is now at a historic low. Compared to August 2020, it dropped by 2.6% in 2021 from 6.6%. This figure suggests that Americans manage mortgage debt increasingly well.

The median credit score among new mortgage borrowers is 781.

(Federal Reserve Bank of New York)

Banks are making it increasingly hard to get a mortgage loan. The current baseline of 781 is quite high compared to 2006’s 708, but it’s still not the highest it’s ever been.

In 2018, 78% of home buyers had mortgages. 

(SuperMoney)

Mortgages remain the overwhelming number one choice when it comes to financing a new home. Yes, people find the process of getting a mortgage stressful. But they also understand the value of owning property. So they apply anyway.

Fintech lending has grown annually by 30%.

(Federal Reserve Bank of New York)

Fintech lenders allow home buyers to submit documents and process applications online instead of one-on-one with lending agents. They are quickly becoming more popular. In 2010, the fintech share of the mortgage market was just 2%, or $34 billion in loan originations. With continued service improvements and reduced technology costs, lenders have every reason to accelerate deployment of fintech solutions in the future.

Fintech lenders reduce the processing time by about 10 days. 

(Federal Reserve Bank of New York)

Choosing a fintech lender can reduce processing time by 10 days, or 20%, on average. You can save even more time depending on the kind of loan you seek. For example, homeowners who are refinancing their property see an average 14.6% reduction in loan processing time. Processing time for ordinary home-purchase mortgages is reduced by an average of 9.2 days.

The average US mortgage interest rate is 3.1%.

(Freddie Mac)

Interest rates have fluctuated between 3% and 4% since reaching a historic low in 2012. The rate nearly reached 5% in the last quarter of 2018, but has since trended downward. The highest historical mortgage interest rate was in 1981, when it reached an astronomical 18.63%. By December 2020, due to the COVID-19 pandemic, the average 30-year fixed mortgage rate dropped to 2.68%.

In 2020, millennials accounted for 53% of home-purchase mortgages.

(Ellie Mae)

Young people seem pretty wary about home ownership and big loans, but the proportion of homes sold to young people is increasing steadily. America counts about 72.1 million millennials among its population. The group is the most important demographic for today’s lenders.

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

(Fannie Mae)

Technology is changing the way the mortgage industry operates. Accustomed to a digital world, younger buyers 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.

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

(Ellie Mae)

Apart from applying for a mortgage loan online, 61% of borrowers in 2020 also used online portals to electronically sign all the necessary documents.

Simpler application process is the most important factor while applying for a loan online. 

(Ellie Mae)

55% of people are taking out loans online becuase they prioritize simplicity. Other important factors include reduced time to close at 53% and fewer in-person interactions at 49%.

Only 7% of banks can handle loan products digitally from the beginning to the end of the process. 

(Markets and Markets)

The slowness of banks to switch to automated processes is one factor behind the rapid growth of nonbanks. Digital lending services have experienced rapid growth over the past six years. Digital lending is expected to grow from $10.7 billion in 2021 to $20.5 billion by 2026 at a CAGR of 13.8%, making digitization a top priority for banks.

Mortgage fraud has increased 37.2% year-on-year from Q2 2020.

(CoreLogic)

Out of 120 mortgage applications, one is fraudulent. This represents a 37.2% increase from Q2 2020, when one in 164 applications contained fraud.

43,000 reverse mortgages were taken out in 2020. 

(Consumer Financial Protection Bureau)

Older citizens have taken out more than a million reverse mortgages since they were legalized in 1990. Both affluent and middle-class homeowners find it handy to be able to take cash out of their homes. Some use it to upgrade their lifestyle, while others seek to improve debt management or pay retirement expenses.

Extrapolating the Data - Our Conclusions

The mortgage industry of 2021 is characterized by disruption and change on a large scale. The massive shift to nonbank lending and the emergence of digital services are allowing new players to deliver faster, better service.

Customers are coming to expect an easier time when dealing with mortgage loans, and they are increasingly flocking to online lenders that promise to streamline the process.

Americans are feeling more confident about taking out mortgages and buying property. Combine buyer confidence with record-high equity levels and a streamlined lending system, and the scene is set for a new industry boom in coming years.