There are several ways to estimate the mortgage frequency, though
financing and refinancing activity has been highly variable over the
past seven years due to both historic lower interest rates and
increased ease of refinancing.
Since 1999, homes have been refinanced after an average of every 3
years, according to Freddie Mac data. In fact, the data shows that
refinancing has been happening faster more recently, as the pre-2001
refinancing was on loans twice as old as more-recent numbers:
2006 Refinancing Data
Here?s an annual average for age of refinanced mortgages from the Freddie Mac data:
1999: 5.0 years
In any year, Freddie Mac estimates that about 40% of the mortgage
market is for refinance activities and another 60% is for a new
mortgage. That doesn?t tell us much about the ?average? homeowner, as
one could seek a new mortgage every 5 years ? or one could refinance
every year. But it tells us something about the refinance sector, so
I?ve included it.
The most-detailed data for home loans is published by the Federal
Financial Institutions Examination Council (FFIEC) under the Home
Mortgage Disclosure Act (HMDA). There is data online on loan
origination going back to 1999 and ? with U.S. Census Data ? it allows
some conclusions on mortgage life.
The HMDA data tables can be found here and you can even do research by
state and by loan types, including refinance and second mortgages.
I?ve used national data because U.S. Census totals are readily
available on total mortgages.
Below are summaries for both sources:
HMDA National Aggregate Report ? Conventional Mortgages (2006)
Here are the numbers on mortgage refinancing back to 1999, taking from
various ?Refinancing? tables and using ?loans originated?:
TOTAL (1999-2005): 49.5 million refinancings
According to the most-recent U.S. Census data on mortgages, at the end
of 2003 there were 42,261,000 conventional mortgages, with another
3,791,000 home equity mortgages and 7,217,000 home equity lines of
credit. More than a third of all homes (25 million) are owned
There is more data on the breakdown of these mortgages in the
following Excel spreadsheet:
U.S. Census Bureau
Mortgage characteristics, 2003
On the basis of ALL mortgages, there are 53.3 million mortgages
outstanding ? so we?re seeing an ?average? life of 7.5 years.
However, that number masks the increase in recent activity (using data
only for the past 5 years, the average mortgage life is only 6.2
Percentages by age would be:
LT 1 year old: 13.3%
1-2 years old: 14.3%
2-3 years old: 25.0%
3-4 years old: 16.9%
4-5 years old: 12.8%
5-6 years old: 3.8%
6-7 years old: 6.9%
longer than 7 years: 7.0%
The following census data from 1999 helps support the conclusions
above, though it only shows the loan origination periods in 5-year
blocks. Also both interest rates and the ease of obtaining mortgage
financing have accelerated mortgage activity since 1999, as the HMDA
data for 2003-2005 shows:
American Housing Survey
WHAT ARE THE MORTGAGE TERMS? (1999)
Google search strategy:
?home mortgage? origination
?mortgage loan? underwriting
?mortgage loan? statistics
"home mortgage disclosure act"
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