Per CNBC

In the first quarter of 2023, the total household debt reached $17 trillion despite a demand for mortgages. New mortgages, including refinancing, reached just $323.6 billion, which brings it closer to its 2014 Q2 numbers.

The NY Feds reported that from January to March, total borrowing for consumers increased by just nearly $150 billion. In the second quarter of 2021, new home loans reached a peak of $1.22 trillion.

This came as 30-year mortgage rates reached a low of just 2.65% in January 2021 as the Fed kept cutting rates. The increase in rates resulted in $12.04 trillion worth of mortgage rates, which was up by 0.1% in the fourth quarter of 2023.

Compared to its 2019 pre-Covid numbers, total debts are now $2.9 trillion from its previous levels. New York Fed public policy research and director of household Andrew Haughwout gave a statement regarding what they expect to happen to mortgages.

Haughwout: “The mortgage refinancing boom is over, but its impact will be seen for decades to come... As a result of significant equity drawdowns, mortgage borrowers reduced their annual payments by tens of billions of dollars, providing additional funding for spending or paydowns in other debt categories,”

In March, it was reported that mortgage applications for home purchases fell to a 28-year low. The average 30-year fixed mortgage during that time reached 7.1%.

During that time, Matthew Graham, the COO at Mortgage News Daily, gave a statement about the situation.

Graham: “Rates continue to move at the suggestion of economic data, and the data hasn’t been friendly. This is scary considering this week’s data is insignificant compared to several upcoming reports,”

In November, it was reported that mortgage demand dropped to its lowest in 25 years. This came as long-term rates continued to hammer the US housing market.

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Resources:

CNBC

The New York Fed