The housing market reached a tipping point in 2022, with a confluence of factors conspiring to erode the profits of mortgage providers. As mortgage rates soared to near 20-year highs, prospective homebuyers became increasingly hesitant to enter the market.
The dramatic decline in mortgage volume had far-reaching consequences for banks and mortgage companies. On average, these institutions financed a mere $2.6 billion in loans in 2022, starkly contrasting the $5 billion they financed in 2021.
As the housing market continues to grapple with the affordability crisis, experts are split on the prospects for a correction. Some predict a significant downturn, with one MBA board member suggesting that home prices could fall by 9% this year.