Yesterday, USMI released its annual state report on low down payment mortgage lending. In comparing data from previous years, the report finds that the first-time buyer and 3% down payment (also known as 97% loan-to-value) segments of the private MI market have grown in market share year-over-year since 2020 across most states. Vermont, Delaware, Maine, South Dakota, and Missouri saw the biggest increase in first-time homebuyers’ share of the private MI market since 2020. Missouri, Michigan, Indiana, Iowa, and Ohio saw the largest growth in the 3% down payment segment’s share of the private MI market since 2020. Texas, Florida, California, Illinois, and Ohio continue to rank as the overall top five states for mortgage financing with private MI in 2023.
Key findings from the report include:
- 800,000: The number of people in 2023 who became homebuyers thanks to private MI.
- Nearly 39 million: The number of low down payment borrowers private MI has helped securing mortgage financing over its 67-year history.
- 27: The number of years it could take a household earning the national median income of $74,580 to save 20% (plus closing costs), for a $394,100 single-family home, the national median sales price.
- 67%: The reduction in years a homebuyer has to wait to achieve home ownership by making a 5% down payment with a mortgage backed by private MI.
- 64%: First-time homebuyers’ share of purchase mortgages backed by private MI.
“Private mortgage insurance is helping to expand access to homeownership in a challenging market for prospective homebuyers,” continued Appleton. “While buyers face many obstacles in purchasing a home, private mortgage insurance helps solve one of the biggest challenges – the need for a large cash down payment – by allowing buyers to put down as little as 3%.”
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