Annual Mortgage Loan Volume Trends: A 5-Year Analysis (2019-2024)
The mortgage lending landscape has undergone dramatic transformations over the past five years, with loan volumes experiencing unprecedented peaks and valleys that reflect broader economic conditions, interest rate movements, and shifting consumer behavior. This comprehensive analysis examines annual mortgage loan volumes from 2019 through 2024, revealing the complex interplay between purchase activity, refinancing waves, and geographic lending patterns that have shaped the housing market.
The Big Picture: Volatility and Recovery
The data reveals a story of extreme volatility in mortgage lending activity. After a relatively stable 2019 with 7.56 million originated loans totaling $2.19 trillion, the market experienced explosive growth in 2020 and 2021, driven primarily by historically low interest rates that triggered massive refinancing activity.
The chart above illustrates the dramatic shifts in mortgage lending activity. The most striking feature is the refinancing boom of 2020-2021, when historically low interest rates created an unprecedented opportunity for homeowners to reduce their monthly payments. Refinance volume peaked at $2.48 trillion in 2020, more than doubling from the previous year, while purchase activity remained relatively stable.
Rising Loan Amounts: The Affordability Challenge
While loan volumes fluctuated dramatically, average loan amounts showed a consistent upward trend that reflects the broader affordability challenges facing homebuyers. The data reveals a significant increase in average loan sizes across all loan types, with purchase loans showing the most pronounced growth.
The data reveals a concerning trend: average loan amounts have increased by 27% over the five-year period, from $289,045 in 2019 to $368,149 in 2024. Purchase loans showed the most dramatic growth, increasing by 37% to reach an average of $383,567 in 2024. This growth significantly outpaces inflation and wage growth, highlighting the mounting affordability challenges facing homebuyers.
Geographic Distribution: California Dominates
The geographic distribution of mortgage lending reveals significant concentration in high-value markets, with California leading by a substantial margin. The Golden State accounted for nearly $2.9 trillion in total loan volume over the five-year period, more than double the second-place state.
California's dominance reflects both its large population and high home values. The state's median home prices, which consistently rank among the highest in the nation, result in larger average loan amounts that inflate total volume figures. Texas and Florida, while ranking second and third respectively, show more balanced growth patterns that reflect their status as major population centers with diverse housing markets.
Loan Type Evolution: Conventional Loans Maintain Dominance
The breakdown by loan type reveals the continued dominance of conventional mortgages throughout the period, though the composition shifted significantly during the refinancing boom.
Conventional loans consistently represented the largest share of mortgage volume, accounting for approximately 75-80% of total lending throughout the period. The refinancing boom of 2020-2021 was particularly pronounced in the conventional market, where volume more than doubled from 2019 levels. VA loans also saw significant growth during this period, reflecting the benefits of low rates for veterans who could refinance without the need for private mortgage insurance.
Key Insights and Market Implications
The Refinancing Wave and Its Aftermath
The data reveals one of the most significant refinancing waves in U.S. history. From 2019 to 2021, refinance volume increased by 143%, driven by mortgage rates that fell to historic lows during the COVID-19 pandemic. This wave had profound implications for the mortgage industry, creating a temporary surge in origination activity that masked underlying weakness in purchase activity.
The sharp decline in refinance volume from 2021 to 2023—dropping from $2.39 trillion to just $162 billion—represents a 93% decrease that fundamentally reshaped the mortgage lending landscape. This decline forced many lenders to pivot their business models, focusing more heavily on purchase lending and exploring new market segments.
Geographic Concentration and Risk
The concentration of lending activity in high-value markets like California creates both opportunities and risks. While these markets generate substantial volume, they also represent significant exposure to regional economic shocks. The data shows that California's share of total national volume remained relatively stable throughout the period, suggesting that geographic concentration is a persistent feature of the mortgage market.
Loan Type Stability
Despite the volatility in overall volume, the relative distribution of loan types remained remarkably stable. Conventional loans maintained their dominant position, while government-backed loans (FHA, VA, USDA) continued to serve their target populations. This stability suggests that borrower preferences and qualification requirements remained consistent even as market conditions changed dramatically.
Looking Ahead: What the Data Tells Us
The 2024 data shows signs of market stabilization, with total volume increasing modestly from 2023 levels. Purchase activity has remained relatively resilient, suggesting that underlying demand for homeownership continues to drive the market even as refinancing opportunities have diminished.
The average loan amounts have increased significantly over the period, reflecting both rising home prices and the concentration of activity in higher-value markets. This trend has important implications for affordability and access to credit, particularly for first-time homebuyers.
Conclusion
The five-year analysis of mortgage loan volumes reveals a market that has experienced unprecedented volatility while maintaining fundamental structural characteristics. The refinancing wave of 2020-2021 created a temporary surge in activity that masked underlying trends, while the subsequent decline has forced the industry to adapt to a new normal of lower overall volume but continued demand for purchase lending.
As we look to the future, the data suggests that the mortgage market will continue to be driven by purchase activity, with refinancing playing a smaller but still important role. The geographic concentration in high-value markets and the continued dominance of conventional loans are likely to persist, creating both opportunities and challenges for lenders and borrowers alike.
The resilience of purchase lending even during periods of high interest rates suggests that the fundamental demand for homeownership remains strong, providing a foundation for continued market activity even as the refinancing boom becomes a historical footnote.
