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."
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