CFPB Reports on 2023 Mortgage Market Trends

The CFPB analyzed residential mortgage lending in 2023 using data collected under the Home Mortgage Disclosure Act ("HMDA").  

In the report, titled 2023 Mortgage Market Activity and Trends, the CFPB concluded that:

• mortgage applications and originations declined. The CFPB noted a 30.3% decrease in the number of mortgage applications in 2023, with originations falling by 32.2% from 2022. Refinance originations had the greatest declines, plummeting by 64.2%, while home purchase originations dropped by 21.3%.

• loan costs rose with the increase in the use of discount points. The CFPB found that more than half of borrowers paid discount points, with a 12.7% increase from 2022. The median discount points for home purchase loans were $3,000, while refinance loans saw a median of $3,902, marking significant price hikes.

• total loan costs increased. The CFPB said that the median cost for home purchase loans rose by 12.2%, reaching $6,684, while refinance loans saw a 47.2% increase, climbing to $7,329. 

• monthly payments on mortgages rose. The CFPB said that the average monthly mortgage payment for a conventional 30-year fixed-rate mortgage rose 12.2% year-over-year, from $2,045 in December 2022 to $2,295 in December 2023, mainly due to rising interest rates.

• debt-to-income ("DTI") ratios remained stable. The CFPB said that despite the higher monthly payments, the average debt-to-income ratio for home purchase borrowers remained stable. The agency noted that the share of applications denied due to high DTI also remained largely unchanged, suggesting a shift toward higher-income borrowers.

• non-depository institutions' market share grew. The CFPB observed that independent mortgage companies continued to expand their share of closed-end mortgage originations, accounting for 61.9% of home purchase loans and 64.3% of refinance loans.