The housing crisis that began in earnest in 2007 caused rates of U.S. home ownership to decline substantially. On virtually every street there seem to be foreclosure signs popping up. Since then, things have turned around and ownership rates have returned to their previous levels and homeowners are continuing to build equity. Here are some of the key numbers that tell the story much better than any narrative can:
Total Debt and Balances
As of late 2018, the most recent period for which we have complete data, the total mortgage debt in the U.S. market was $10.3 trillion. The average balance on a home mortgage was $148,000. Keep in mind that “average” takes into account every homeowner, so there can be wildly different rates for young and old owners. In fact, the average balance on a new mortgage, immediately after purchase, is the most revealing number of all: it’s $260,300. That figure does not represent the price of the average new home, but the amount owed on the home after down payments have been calculated into the mix.
The Homeownership Rate
Economists often cite a nation’s home ownership rate as a measure of how healthy the economy is. More telling are changes in the rate of ownership, which can indicate higher borrowing rates and a weakening job market. For 2018, the U.S. home ownership rate was 64.4 percent. That number represents the percentage of homes occupied by buyers as opposed to renters. It’s in line with historic rates and means that about two-thirds of U.S. house-dwellers own their homes, or are in the process of paying off a mortgage. Of all the homeowners who are not renting, about one-third own their homes outright. In other words, one-third of those 64 percent of homeowners have paid their homes off completely.
Credit Scores and Down Payments
Every new homeowner wonders whether their mortgage amount and down payment amount are in line with national averages. Here are the raw numbers from 2018: Among buyers obtaining new mortgages, the median credit score was 758 and the average down payment amount was $28,900.
Other revealing statistics related to home ownership included the dollar amount of mortgages that originated in 2017, which was $1.75 trillion. It’s also instructive to look at who is making the most mortgage loans among banks, credit unions and non-bank lenders. For the record, non-bank lenders are the clear leaders, with 51 percent of all mortgage originations, followed by banks, with 40 percent. Credit unions accounted for the remaining 9 percent of all mortgage originations in the U.S. in 2017.
It’s interesting to note that credit score requirements are a bit looser now than they were in the years immediately following the housing crisis. But average credit scores for new buyers have actually risen in spite of that trend. In 2011, the rate of delinquency on single family homes stood at just under 12 percent. Nowadays, that rate is much lower, at just 3 percent. Delinquency is measured as the percent of mortgage loans that are past due by more than 30 days, or one payment.