Refinancing applications tumbled even more, down nearly two-thirds
There has beena significant decline in mortgage lending in 2024, according to theConsumer Financial Protection Bureau (CFPB), which released its annual report on trends in the mortgage market today.
Both loan applications and originations fell by about a third from 2022, with refinancing activity experiencing a sharper drop, especially for single-family homes. In fact, refinancing originations were down nearly two-thirds from 2022.
The number of mortgage applications decreased by about 4.3 million, or 30.3%, from 2022, while originations decreased by 2.7 million, or 32.2%.
Refinancing of single-family homes fell by 64%. Most of the refinance originations left in the market were a small number of cash-out refinance loans.
Rising interest rates contributed to higher monthly mortgage payments, with the average payment for a 30-year fixed-rate mortgage increasing by $250 from December 2022 to December 2023. Despite this, the average debt-to-income ratio for home purchases stayed stable, likely due to lenders focusing on higher-income borrowers.
In 2023, more than half of all borrowers paid discount points, with a significant increase from 2022. Additionally, the median total loan costs rose for both home purchase and refinance loans.
Notably, Hispanic and Black borrowers saw the largest increases in loan costs.
Independent mortgage companies continued to dominate the market, originating more loans than banks or credit unions. The report also found that the median total loan costs for refinance loans saw a sharp rise compared to home purchase loans.
The report highlights key shifts in the mortgage market, including the rise of non-depository institutions and the growing burden of rising costs on borrowers.
Photo Credit: Consumer Affairs News Department Images
Posted: 2024-12-14 00:10:45
