Homebuyers Used Private Mortgage Insurance to Purchase Homes in a Challenging Real Estate Market

New Report Finds Private Mortgage Insurance is a Key Resource for Low Down Payment Buyers

WASHINGTON, July 30, 2024 /PRNewswire/ -- In the midst of ongoing housing market challenges, characterized by high interest rates, high home prices, and constrained inventory, a new report from U.S. Mortgage Insurers (USMI) shows that first-time and low down payment borrowers across the country continued to purchase homes with low down payment mortgages backed by private mortgage insurance. Nearly 800,000 Americans used private mortgage insurance to purchase a home in 2023, and 64% of them were first-time buyers. This new USMI data on low down payment and first-time borrowers provides some silver lining insights within the current residential real estate market.

"Private mortgage insurance continues to help buyers qualify for financing and become homeowners with down payments as low as 3%, and remains one of the most important tools available to first-time and low- and moderate-income buyers in all market cycles," said Seth Appleton, USMI president. "Without private mortgage insurance, far too many buyers would remain on the sidelines instead of building intergenerational wealth and working towards the American Dream of homeownership."

USMI's report found in 2023:

• Approximately 800,000 people became homeowners using low down payment mortgages backed by private mortgage insurance.
• 64% of purchasers with private mortgage insurance were first-time homebuyers.
• First-time buyers' share of the private mortgage insurance market increased 7% from 2020 through 2023.
• $346,817 was the average loan amount for a home purchased with private mortgage insurance.
• Saving for a 20% down payment could take the average potential homebuyer 27 years — three times longer than the time to save for a 5% down payment that's often used with private mortgage insurance.
• The total value of mortgage originations supported by private mortgage insurance was approximately $283 billion.
• The industry insured nearly $1.6 trillion of mortgages, including $1.4 trillion of mortgages backed by Fannie Mae and Freddie Mac.

Click here for the complete report and fact sheets.

USMI is dedicated to a housing finance system backed by private capital that enables access to housing finance for borrowers while protecting taxpayers. Mortgage insurance offers an effective way to make mortgage credit available to more people. USMI is ready to help build the future of homeownership. Learn more at www.usmi.org.

Media Contact: Justin Higgins
[email protected]

SOURCE U.S. Mortgage Insurers