Mortgage borrowers have long enjoyed a period of low interest rates but with inflation looming, many countries worldwide increased mortgage rates. Despite rates rising, in March 2023, countries such as Finland, Portugal and the Netherlands had mortgage rates below three percent. In the United States, the average interest rate was approximately 6.1 percent.
Which are the leading mortgage markets?
An easy way to estimate the importance of the mortgage sector in each country is by comparing household debt depth, or the ratio of the debt held by households compared to the county's GDP. In 2020, Hong Kong, the U.S., and China had some of the highest household debt to GDP ratios worldwide. While this indicator shows the size of the sector relative to the country’s economy, the value of mortgages outstanding allows to compare the market size in different countries. In Europe, for instance, the United Kingdom, Germany, and France were the largest mortgage markets by outstanding mortgage lending.
How is new mortgage lending developing in the U.S.?
In the United States, new mortgage lending experienced an upwards trend in 2020. This is largely due to the growth of new refinance loans that allow homeowners to renegotiate their mortgage terms and replace their existing loan with a more favorable one. With interest rates rising and house prices surging, the mortgage market has has started to cool down.
