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US mortgage debt to surpass $14 trillion in 2022

January 12, 2022 (New York, NY) – The total value of residential mortgage debt in the US will continue to experience solid growth into 2022 and 2023. In our inaugural forecast on mortgage loan debt, we expect total mortgage values to continue growing at the same pace for the next two years, even with the expectation that interest rates will rise.

In 2022, the total value of US mortgage loan debt will grow 3.7% to $14.412 trillion. That’s nearly the same rate as in 2021, with that pace remaining steady through the end of 2023. This follows 4.7% growth in 2020, a rate not seen since before the Great Recession.

“Low interest rates have fueled a red-hot housing market that has led to an increase in existing home prices, which, in turn, have increased the amount that homebuyers are borrowing,” said Peter Newman, senior forecasting analyst at Insider Intelligence. “Even if the Fed raises rates in 2022, they would still remain relatively low, and we expect mortgage transaction value to continue its pace.”

The average mortgage debt balance per account will be $177,477 in 2022, up 3.3% over 2021. This comes after robust 5.1% growth in 2020, as the pandemic fueled new home purchases. The average will grow another 3.2% in 2023 to reach $183,128.

While transaction values climb, the number of residential mortgages outstanding remains relatively flat. In 2022, the number of US mortgage accounts will grow 0.4% to 81.2 million. It will grow another 0.5% in 2023 to 81.6 million.

“In terms of the flat number of accounts, there are a few factors going on,” Newman said. “Many people were selling homes for greater than their remaining balances, then using that equity to purchase new homes for cash, removing a mortgage account from the totals. Also, speculative and commercial purchasing of residential properties, by individual investors and institutions, to use low rates to amass rental properties removed some from the residential totals. Another possible reason was people paying off mortgages fully using stimulus funds, other savings, and market gains. All those factors, and likely others, fed into the number of accounts holding flat.”

This year will be one of the most dynamic on record, driven by the crosscurrents of heavy consumer demand, inefficiency in the lending process, and the shift to a digital-first lending model. Lenders will be under pressure to improve customer satisfaction and build new digital home-buying experiences that will help them win more business.

 

Methodology
Forecasts and estimates from Insider Intelligence are based on an analysis of quantitative and qualitative data from research firms, government agencies, media firms, and public companies, as well as from interviews with top executives at publishers, ad buyers, and agencies. Data is weighted based on methodology and soundness. Each eMarketer forecast fits within the larger matrix of all its forecasts, with the same assumptions and general framework used to project figures in a variety of areas. Regular re-evaluation of available data means the forecasts reflect the latest business developments, technology trends, and economic changes. 

  

About Insider Intelligence 

Insider Intelligence aims to be the world’s leading research service focused on digital transformation. Our mission is to empower professionals with the data, insights, and analysis to make grounded decisions in a digital world. Each year, we produce nearly 300 reports, 7,000 charts, 1,500 newsletters, and 200 forecasts across the industries of Advertising, Media, and Marketing; Financial Services; Healthcare; and Retail and Ecommerce. Insider Intelligence is owned by European media giant Axel Springer S.E. and was formed in 2020 from the combination of eMarketer and Business Insider Intelligence (BII). 

Posted on January 12, 2022.