WASHINGTON, D.C. — The Consumer Financial Protection Bureau’s (CFPB) 2023 annual report on residential mortgage lending highlights a sharp decline in mortgage activities and rising costs for borrowers. The report, based on data collected under the Home Mortgage Disclosure Act (HMDA), outlines significant trends in home purchases, refinancing, and loan costs.
Mortgage loan applications and originations both dropped dramatically, with applications falling by 30% and originations by 32% compared to 2022. Refinancing activity saw the steepest decline, with single-family refinance originations plunging 64%, primarily limited to cash-out loans.
Rising interest rates significantly impacted borrowers, driving average monthly payments on conventional 30-year fixed-rate loans from $2,045 in December 2022 to $2,295 a year later. Despite higher costs, debt-to-income ratios remained stable, suggesting a trend toward loans favoring higher-income applicants.
The report also notes that more than half of borrowers, or 56%, paid discount points in 2023—a 13% rise from the prior year. Median discount points were $3,000 for home purchases and $3,900 for refinancing. Total median loan costs for home purchases increased to $6,700, with refinance loans exceeding $7,300. Hispanic and Black borrowers experienced faster cost increases than Asian and non-Hispanic white borrowers.
Additionally, non-depository institutions solidified their position in the mortgage market, originating approximately 62% of home purchase loans and 64% of refinance loans in 2023, overtaking traditional banks and credit unions.
The CFPB’s findings highlight changes in mortgage lending practices and demographic impacts shaped by economic factors and regulatory shifts in the lending market. This is the sixth year reflecting expanded data collection under the revised HMDA rules.
For the latest news on everything happening in Chester County and the surrounding area, be sure to follow MyChesCo on Google News and MSN.