Fixed Rate 30-Year Mortgages Accounted for More than Half of U.S. Home Loans Last Year
Fixed rate 30-year mortgages accounted for 52.8% of all mortgages last year, a 5% higher percentage than in 2016. This is based on results from the annual Residential Real Estate Survey Report released recently by the American Bankers Association (ABA).
More than 150 banks participated in the survey this February and March by providing data, primarily about their mortgage lending activities last year.
What?s the Breakdown by Loan Type?
While the longer-term fixed rate mortgages made up a larger percent of all home loans in 2017 than in 2016, the percentage of fixed rate 15-year loans were down. They accounted for 15.4% of all mortgage loans in 2017, compared to 18.6% in 2016.
Other types of fixed rate mortgages accounted for 11.8% of home loans in 2017. Next were one-year adjustable rate mortgages (ARMs), which accounted for 7.7% of mortgage loans last year, followed by interest-only ARMs, 5.9%; 7/1 ARMs, 4.4%; 5/1 ARMs, 1.4%; and 3/1 ARMs, 0.6%,
More First-Time Home Buyers Reported
The percentage of single-family mortgage loans that were for first-time home buyers also reached a record high of 17% in 2017. This percentage has been on the rise for several years now, increasing by 1% every year since 2014.
Predictably the percentage of purchase loans was also up compared to refinance loans. In 2017, for example, 60% of family mortgage loans were for purchases, compared to 45% in 2015 and 53% in 2016.
Regulatory Change Has Hugely Impacted Mortgage Lenders
One thing that was clear in reviewing the ABA report is that U.S. banks have been greatly impacted by recent regulatory reforms. About 96% said they?ve had ?higher mortgage-specific compliance costs? due to regulatory changes, while 97% reported higher consulting costs.
In addition, 74% said they?d had to hire more staff to keep up with the changes, with 69% saying they?d added one-two new staff members. Another 23% had added three-five positions, 4% had added five-10, and another 4% had added more than 10.
We Hope You?ve Enjoyed this Information on Mortgages
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