The total number of mortgage applications and originations “dropped significantly” in 2023, with both falling by roughly a third from the year before, the Consumer Financial Protection Bureau said today in its annual mortgage market trends report. 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%.
Refinance originations dropped by more than half in 2023 from a year before while home purchase originations dropped by less than one-third, CFPB reported. Lenders reported approximately 3.2 million closed-end site-built one-to-four family (single-family) home purchase originations in 2023, a 21.3% decrease from 4.1 million originations in 2022. Closed-end site-built single-family refinance originations fell from 2.2 million in 2022 to 796,000 in 2023, a reduction of 64.2%.
Other findings in the report:
- Among the first lien closed-end home purchase loans secured by a single-family principal residence and not for commercial/business purpose, about 56.6% of loans paid some discount points in 2023, which was a 12.7% increase from 2022. The median discount points paid for home purchase loans were $3,000 and that for refinance loans were $3,902 in 2023.
- The median total loan costs for home purchase loans in 2023 was $6,684, up by 12.2% from $5,954 in 2022. The median total loan costs for refinance loans reached $7,329 in 2023, compared to $4,979 in 2022, representing a 47.2% increase. Hispanic white and Black borrowers experienced faster increases than Asian and non-Hispanic white borrowers.
- The average monthly payment excluding taxes and insurance for borrowers taking out a conventional conforming 30-year fixed-rate mortgage rose from $2,045 in December 2022 to $2,295 in December 2023, which represented a 12.2% increase. The increase was driven almost entirely by the rise in mortgage interest rates.
- Among non-depository institutions, independent mortgage companies originated significantly more loans than mortgage companies affiliated with depository institutions. In 2023, independent mortgage companies originated 61.9% (about 1.7 million) of all closed-end home purchase loans and 64.3% (about 355,000) of all closed-end refinance loans.
