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MortgagePoint » Your Trusted Source for Mortgage Banking and Servicing News 72 January 2024 J O U R N A L In 2021, the value of mortgage origination surpassed $4.4 trillion, a new all-time high. Originations fell to roughly half that level in 2022 but were still considerably higher than in the decade before the pandemic. Among existing mortgages, over half of originations occurred between 2020 and 2022. This includes 17.8% in 2020, 23.4% in 2021, and 12.6% in 2022. The data shows that mortgage origi- nations accelerated in 2020 when the Fed reduced interest rates to zero in March of that year. They began to taper off in 2022 after the Fed began raising rates, also in March. By comparison, the share of outstanding mortgages originated in 2019 was only 5.5%. In 2018, it was just 3.2%. Mortgage originations during the pandemic eclipsed the previous peaks of the post-dot-com boom and the sub- prime mortgage bubble. Nearly two-thirds (64.5%) of existing mortgages have 30-year rates below 4%. The breakdown is as follows: 38.2% of mortgages have interest rates between 3%-3.99%, 25.8% have rates between 2%-2.99%, and 0.5% have rates below 2%. Only 2.4% of existing mortgages have in- terest rates at 7% or higher —the current mortgage rate. At current levels, the discrepancy be- tween the current 30-year fixed mortgage rate (7.79%) and the effective mortgage rate (3.6%) is the widest since 1976. Younger Generations Impacted the Most Record-low mortgage rates between 2020 and early 2022 made home-buying more affordable for younger generations. In 2022, roughly 43% of new homebuyers were Millennials and 2% were Gen Zers. However, as rates began to rise, mil- lennials' share of new purchases fell to 28% as of August 2023. Gen Zers' share of purchases doubled to 4% but remained relatively scant given the cohort's size (70 million people). Younger demographics also own a much smaller share of the real estate wealth, given the size of their respective generations. They also accumulated the least real estate wealth during the pandemic housing boom despite being in the prime home-buying age. The total U.S. housing stock was worth a record $46.8 trillion in June 2023. However, Millennials' share of that wealth was only $5 trillion, compared to $18 trillion for baby boomers and $13.4 trillion for Gen X. Millennials' housing wealth exceed- ed that of the Silent Generation, which owned $4.7 trillion worth of residential real estate. Gen Z's share of the housing wealth is likely much smaller than mil- lennials, given their share of purchases and mortgage originations. According to Redfin experts, younger generations are now bearing the brunt of record mortgage rates. "Tons of homeowners scored an in- credible deal during the pandemic: a 3% mortgage rate for the remainder of their 30-year loan," said Chen Zhao, Redfin Economics Research Head. "Now they're staying put because moving would mean taking on a rate that's twice as high […] The winners are homeowners who bought before mortgage rates started rising; they continue to build equity even though homebuyer demand has slowed. The losers, sadly, tend to be first-time buyers." VA SURPASSES GOAL TO HOUSE VETS IN 2023 T he U.S. Department of Veterans Affairs has announced that it has permanently housed 38,847 homeless veterans through October 2023—surpassing the calendar year goal to house 38,000 veterans two months early. Through October, the VA has also en- gaged with 34,498 unsheltered veterans to connect them with the housing and resources they need, exceeding the VA's calendar year goal by 123%; ensured that 96.2% of veterans housed have remained in housing, exceeding the Department's calendar year goal by 1.2%; and has ensured that 93.1% of the veterans who returned to homelessness have been re- housed or are on a pathway to rehousing, exceeding the Department's calendar year goal by 3.1%. "More than 38,000 veterans now have the safe, stable homes that they deserve—and there's nothing more important than that," VA Secretary Denis McDonough said. "While we met our goals for 2023, we're not stopping here. We're going to keep pushing—through the end of this calendar year and beyond—until every veteran has a safe, stable place to call home in this country they fought to defend." Ending veteran homelessness is a top priority of the VA and President Biden, who has made supporting U.S. veterans a key pillar of the Unity Agenda for the nation. In 2022 alone, the VA housed more than 40,000 formerly homeless veterans, prevented more than 17,700 vet- erans and their families from falling into homelessness, and helped nearly 191,700 additional veteran families who were ex- periencing financial difficulties to retain their homes or avoid foreclosure. Thanks in part to these efforts, the number of veterans experiencing homelessness has fallen by 11% since early 2020, and by more than 55% since 2010. The VA's efforts are built on the evi- dence-based "Housing First" approach, which prioritizes getting veterans into housing, and then providing them with the wraparound support they need to stay housed, including healthcare, job training, legal and education assistance, and more. VA has also made progress in combating veteran homelessness in the Greater Los Angeles area, providing 1,464 homeless vets with permanent housing thus far this year—which is the most of any city in America and on pace to exceed VA's calendar year goal for 2023. Last year, VA provided 1,301 permanent housing placements to formerly home- less vets in LA, the most of any city in America. VA staff and its community partners nationwide help veterans find perma- nent housing such as apartments or houses to rent or own, often with subsi- dies to help make the housing affordable. In some cases, VA staff and partners help veterans end their homelessness by reuniting them with family and friends.