In an unprecedented housing affordability crisis, independent mortgage banks and mortgage subsidiaries of chartered banks lost an average $301 for every mortgage they financed in 2022, the first time that banks posted negative profits for financing home loans since the Mortgage Bankers Association began recording profits in 2008, Insider reports. The 2022 deficit represents a 113% decrease from the previous year's average income of $2,339 per mortgage.
Negative profits in 2022 are likely a result of slower housing activity caused by higher financing costs coupled with elevated home prices, leading to lower purchase and refinance volume.
"The rapid rise in mortgage rates over a relatively short period of time, combined with extremely low housing inventory and affordability challenges, meant that both purchase and refinance volume plummeted," [Marina] Walsh said. "The stellar profits of the previous two years dissipated because of the confluence of declining volume, lower revenues, and higher costs per loan."
Advertisement
Related Stories
Housing Markets
Metros Where Housing Prices Have Doubled in Less Than 10 Years
Historical data show it's taken less than 10 years for home prices to double in 68 of the country’s 100 largest cities
Housing Policy + Finance
Even With Inflation Running Hot and Elevated Mortgage Rates, Buyer Demand Rises
Mortgage rates will likely stay high for the next few months, but that doesn't seem to be deterring homebuyers
Financing
Q1 2024 Foreclosure Activity Rises Slightly
Data show New York, Houston, and Chicago topping the list of major metros with the greatest number of foreclosure starts during Q1 2024
