Global mortgage industry: selected developed markets - statistics & facts

After the global financial crisis, mortgage rates enjoyed more than a decade of exceptionally low levels, making it affordable for individuals with a steady income and some savings for a down payment to obtain a loan and purchase a home. However, towards the end of 2021, surging inflation and economic instability set motion to a new phase in mortgage markets. The global trend of tightening of monetary policy led to steady increases in mortgage rates. While history has witnessed periods of even higher rates, there is a new significant factor this time: Driven by strong demand, house prices escalated significantly during the coronavirus pandemic. The combination of expensive housing and high borrowing costs have led to a decline in homebuyer sentiment and mortgage borrowing, respectively. In the United States, mortgage originations plummeted, after reaching historically high levels. Mortgage finance declined also in Australia and across Europe.

How do you measure the size of the mortgage market?

Mortgages are the most common way to finance real estate. Due to their collateralized nature, mortgages are considered one of the investment instruments with the lowest level of risk. As such, they play an integral role in monetary policy and the functioning and stability of the financial system. Countries possessing more advanced financial sectors and lending practices tend to have larger mortgage markets. For many countries, the ratio of household debt (mortgages and consumer credit) to GDP exceeds 100 percent, reaching values as high as 259 percent in Hong Kong, and 216 percent in the United States. The mortgage market is generally divided into two segments. The primary mortgage market refers to lending to the household and commercial sector, whereas in the secondary market, lenders bundle together mortgages into mortgage-backed securities (MBS) and sell them to pension funds, insurance companies, and other types of investors. In the United States, the primary mortgage market was worth roughly 19.3 trillion U.S. dollars in mortgages outstanding, whereas the secondary market, or the value of mortgage-backed securities outstanding, was valued at 11.9 trillion U.S. dollars in 2021.

How have mortgage rates developed since the beginning of the pandemic?

In the United States, which boasts one of the most vibrant and fiercely competitive housing markets globally, there has been a significant surge in mortgage rates. The 15-year fixed rate rose from 2.34 percent in the fourth quarter of 2021 to 5.96 percent in the same quarter 2022 , representing a more than twofold increase in just one year. The UK followed a similar trajectory, with the 10-year fixed rate climbing to 4.86 percent in January 2023. Meanwhile, Germany experienced an even more pronounced escalation, albeit with generally lower rates. The uptick in mortgage rates was not limited to the U.S. and major European markets alone. In Australia, the interest rate for owner-occupier housing surged to 4.9 percent in March 2023, from 2.64 percent the previous year.
This text provides general information. Statista assumes no liability for the information given being complete or correct. Due to varying update cycles, statistics can display more up-to-date data than referenced in the text.
Published by Statista Research Department, Feb 28, 2024

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