The mortgage landscape of 2023 told a story of dramatic highs and lows, from a staggering $1.62 trillion in originations amid a 44% market plunge to surging rates and shifting borrower demographics.
Key Takeaways
- In 2023, U.S. mortgage originations totaled $1.62 trillion, down 44% from 2022 due to higher rates.
- Purchase mortgage originations in Q4 2023 accounted for 78% of total originations, up from 69% in Q4 2022.
- Refinance originations dropped to $175 billion in 2023, the lowest since 1996 excluding pandemic years.
- The average 30-year fixed mortgage rate was 6.81% as of December 29, 2023.
- 15-year fixed rates averaged 6.02% in 2023, up from 3.94% in 2022.
- ARM rates for 5/1 loans averaged 6.45% in Q4 2023, 36 basis points below fixed.
- Overall delinquency rate for mortgages was 3.92% in Q4 2023, up 12 bps QoQ.
- FHA delinquency rate stood at 10.38% in Q4 2023, highest among sectors.
- Seriously delinquent mortgages (90+ days) at 1.38% in Q4 2023.
- Total U.S. mortgage debt outstanding reached $12.25 trillion in Q4 2023.
- Home-secured debt per household averaged $220,000 in 2023.
- Mortgage balances for FHA loans totaled $2.1 trillion end-2023.
- Housing affordability index dropped to 98.1 in Q4 2023, below 100.
- Monthly mortgage payment for median home rose 70% YoY to $2,100 in 2023.
- Median home price hit $417,700 in Q4 2023, up 4.3% YoY.
Higher rates sharply reduced mortgage lending in 2023 despite strong purchase loan demand.
Affordability and Home Prices
1Housing affordability index dropped to 98.1 in Q4 2023, below 100.
Verified2Monthly mortgage payment for median home rose 70% YoY to $2,100 in 2023.
Verified3Median home price hit $417,700 in Q4 2023, up 4.3% YoY.
Verified4Home price-to-income ratio reached 5.5 nationally in 2023.
Directional5Rent vs. buy index showed buying 35% cheaper in 40% of metros in 2023.
Single source6Share of homes affordable to median income fell to 20% in 2023.
Verified7San Francisco median home price $1.3 million, affordability index 35.
Verified8First-time buyer median down payment was 9% in 2023.
Verified9Debt-to-income ratio for new mortgages averaged 36% in Q4 2023.
Directional10Home price growth slowed to 3.8% YoY in December 2023 per FHFA.
Single source11Inventory of homes for sale rose 15% YoY to 1.1 million in Q4 2023.
Verified12Projected affordability improvement if rates fall to 5.5% in 2024.
Verified13Black homeownership rate at 44% in 2023, gap of 30 points vs. white.
VerifiedAffordability and Home Prices Interpretation
The American dream now requires a financial contortionist, as buying a home demands a jaw-dropping 70% more in monthly payments and is only affordable to a fifth of median earners, yet still remains curiously cheaper than renting in many cities.
Delinquency and Foreclosure Rates
1Overall delinquency rate for mortgages was 3.92% in Q4 2023, up 12 bps QoQ.
Verified2FHA delinquency rate stood at 10.38% in Q4 2023, highest among sectors.
Verified3Seriously delinquent mortgages (90+ days) at 1.38% in Q4 2023.
Verified4Foreclosure starts increased 10% YoY to 0.25% of active loans in Q4 2023.
Directional5Subprime mortgage delinquency hit 12% in late 2023 per Equifax data.
Single source6New York foreclosure inventory rate was 0.65% in Q4 2023, highest nationally.
Verified7Overall foreclosure rate remained at 0.20% in December 2023, stable YoY.
Verified8VA loan delinquencies fell to 4.2% in Q4 2023 from pandemic highs.
Verified9Early-stage delinquencies (30-59 days) rose to 2.45% in Q4 2023.
Directional10Foreclosure sales totaled 68,000 in 2023, down 80% from 2009 peak.
Single source11Jumbo loan delinquency rate was 0.85% in Q4 2023, lowest segment.
Verified12Illinois had 0.48% foreclosure rate in 2023, second highest nationally.
Verified13Prepayment penalties contributed to 15% of delinquencies in adjustable-rate loans.
Verified14Total foreclosure inventory at 0.29% in Q1 2024, up slightly.
DirectionalDelinquency and Foreclosure Rates Interpretation
While the broader market shows only mild indigestion, a closer look reveals heartburn in specific sectors, as FHA and subprime borrowers struggle while jumbo loans and overall foreclosure rates remain comfortably stable.
Government Programs and Policies
1Total GSE mortgage portfolio $6.8 trillion as of end-2023.
Verified2FHFA HARP refinances saved borrowers $80 billion since 2009 inception.
Verified3FHA-insured loans outstanding: 8.5 million with $1.6 trillion UPB in 2023.
Verified4VA no-down-payment loans originated 400,000 in FY2023.
Directional5Ginnie Mae-guaranteed MBS issuance $700 billion in 2023.
Single source6CFPB mortgage servicing rules reduced errors by 60% since 2013.
Verified7Fannie Mae credit risk transfer covered $50 billion in 2023.
Verified8USDA rural housing loans funded 25,000 homes in FY2023.
Verified9Homeowner Assistance Fund disbursed $5.5 billion to 500,000 households by 2023.
Directional10Qualified Mortgage (QM) loans comprised 95% of originations in 2023.
Single source11GSE affordable goals met 2023 targets with 27% low-income loans.
Verified12Forbearance exits reached 99% resolution rate post-COVID per FHFA.
VerifiedGovernment Programs and Policies Interpretation
The mortgage market now resembles a surprisingly responsible giant, juggling trillions in loans with one hand while meticulously using an array of government programs and rules to catch falling borrowers, fund new homes, and generally prevent the entire house of cards from collapsing again.
Mortgage Debt and Balances
1Total U.S. mortgage debt outstanding reached $12.25 trillion in Q4 2023.
Verified2Home-secured debt per household averaged $220,000 in 2023.
Verified3Mortgage balances for FHA loans totaled $2.1 trillion end-2023.
Verified4Average mortgage balance grew 4% YoY to $252,000 in Q4 2023.
Directional5Student debt holders' mortgage balances 20% lower than average.
Single source6Negative equity mortgages dropped to 1.2 million in Q4 2023.
Verified7Jumbo mortgage balances outstanding at $1.5 trillion in 2023.
Verified8Senior lien mortgage balances increased 5.5% YoY to $11.8 trillion.
Verified9HELOC balances reached $320 billion in Q4 2023, up 5% YoY.
Directional10Mortgage debt-to-GDP ratio stabilized at 75% in 2023.
Single source11Underwater mortgages share fell to 2.5% nationally in 2023.
Verified12Total mortgage originations since 2000 exceed $50 trillion cumulative.
VerifiedMortgage Debt and Balances Interpretation
We're collectively submerged in a $12 trillion sea of home loans, yet we're impressively treading water with fewer underwater mortgages and a stable debt-to-GDP ratio, proving that while we're house-poor, we're not yet sinking.
Mortgage Originations and Volumes
1In 2023, U.S. mortgage originations totaled $1.62 trillion, down 44% from 2022 due to higher rates.
Verified2Purchase mortgage originations in Q4 2023 accounted for 78% of total originations, up from 69% in Q4 2022.
Verified3Refinance originations dropped to $175 billion in 2023, the lowest since 1996 excluding pandemic years.
Verified4FHA mortgage originations reached 1.1 million loans in 2023, comprising 25% of the market.
Directional5VA purchase loans originated $120 billion in volume during 2023, supporting 350,000 veterans.
Single source6Conventional conforming loan originations fell 50% YoY to $1.0 trillion in 2023.
Verified7Jumbo mortgage originations declined 60% in 2023 to $250 billion amid rate hikes.
Verified8First-time homebuyer mortgage share was 31% of originations in 2023, per NAR data.
Verified9Adjustable-rate mortgage (ARM) originations surged to 10% market share in Q4 2023 from 2% prior.
Directional10Total mortgage applications increased 5% WoW in late December 2023 to seasonally adjusted index of 200.
Single source11In 2022, mortgage originations peaked at $2.9 trillion before declining sharply.
Verified12Q1 2024 originations estimated at $350 billion, lowest Q1 since 1997.
Verified13Black homebuyers' mortgage originations grew 12% YoY in 2023 to 150,000 loans.
Verified14Rural mortgage originations totaled $80 billion in 2023, 5% of national volume.
Directional15Investor purchase mortgage share hit 20% in Q4 2023 per CoreLogic.
Single sourceMortgage Originations and Volumes Interpretation
The market's 44% tumble to $1.62 trillion shows how higher rates froze refinancers in place, tilting the landscape decisively toward determined purchasers who, while embracing adjustable-rate loans and supported by government programs, are navigating the lowest springboard for homebuying in nearly three decades.
Mortgage Rates
1The average 30-year fixed mortgage rate was 6.81% as of December 29, 2023.
Verified215-year fixed rates averaged 6.02% in 2023, up from 3.94% in 2022.
Verified3ARM rates for 5/1 loans averaged 6.45% in Q4 2023, 36 basis points below fixed.
Verified4Mortgage rates rose above 7% for 15 weeks straight in late 2023, highest since 2000.
Directional5Effective mortgage rate spread over Treasury yields widened to 250 bps in 2023.
Single source6Jumbo 30-year fixed rates averaged 7.15% in December 2023.
Verified7FHA 30-year rates were 6.92% on average in Q4 2023.
Verified8Rates for 30-year fixed mortgages in California averaged 6.95% in 2023.
Verified9Weekly mortgage rate volatility hit 25 bps average in October 2023.
Directional10Projected 30-year fixed rate for Q4 2024 is 6.2%, per Fannie Mae forecast.
Single source11Historical low: 30-year fixed at 2.65% in January 2021.
Verified127/1 ARM rates dipped to 6.25% in early 2024 amid Fed signals.
Verified13Mortgage points paid averaged 0.8 per loan in 2023 to buy down rates.
Verified14Rates for investment property mortgages averaged 7.5% in 2023.
DirectionalMortgage Rates Interpretation
The era of historically cheap money is over, replaced by a sobering new normal where even the most optimistic borrowers are now considering paying extra just to secure a rate that would have been considered usury a few short years ago.
Sources & References
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