Housing has become so unaffordable that the effects of the market are cutting profits for the banks which issue mortgages for consumers to purchase homes.
For the first time since the Mortgage Bankers Association began releasing its report in 2008, MBA says independent banks that issue mortgages along with the subsidiaries of chartered banks have lost an average of $301 for each and every loan they issued in 2022.
To compare, the average profit for a home loan for a bank was $2,339 in 2021, according to theMBA.
Marina Walsh, MBA's vice president of industry analysis said, "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.”
Contributing to the problem is the cost of production for financing a loan, which jumped to an all time high since the beginning of MBA's record keeping, to $10,624 per home loan.
"Productivity in 2022 fell to a low of 1.5 closed loans a month per production employee," Walsh said.
Reports previously cited MBA board members who predicted that home prices this year could drop by 9%.
Meanwhile, a National Association of Realtors report predicted that housing prices had already hit their bottom for the year.
SEE MORE: Why is it more expensive than ever to buy a home in US?
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