The U.S. mortgage industry is a crucial part of the housing market, playing an important role in facilitating home ownership through the connection between home buyers and lenders.

This industry encompasses various activities including the provision, management, guarantee, and distribution of home mortgages, holding a significant position in the U.S. economy and financial system.

1. Structure of the Mortgage Industry and Key Institutions

The U.S. mortgage industry is primarily composed of the following key institutions:

• Lenders: Various financial institutions such as banks, credit unions, and mortgage companies provide home mortgages.

• Mortgage Brokers: They act as intermediaries between borrowers and lenders, comparing various loan products to present optimal conditions.

• Mortgage Insurers: They provide insurance to lenders to spread the risk of home mortgages.

• Government-Sponsored Enterprises (GSEs): Fannie Mae and Freddie Mac play a crucial role in enhancing the liquidity of home mortgages and maintaining the stability of the housing market.

2. Mortgage Rates and Market Trends

Mortgage rates fluctuate based on the demand and supply in the housing market, economic indicators, and the monetary policy of the Federal Reserve. As of December 26, 2024, the average rate for a 30-year fixed mortgage surged to 6.85%, marking the highest level since early June.

This rise in rates increases the borrowing burden for home buyers and impacts the activity in the housing market. Particularly, higher rates tend to decrease the demand for home purchases and slow the rate of increase in home prices.

3. Key Trends in the Mortgage Market

• Rising Rates: In 2024, mortgage rates increased due to the Federal Reserve's rate hikes, raising the borrowing burden for home buyers and affecting market activity.

• Changes in Home Purchase Demand: Despite rising rates, mortgage applications for home purchases increased by 2% on a weekly basis, indicating a trend of buyers moving from a wait-and-see approach to signing home contracts.

• Fluctuations in the Mortgage Market Index: The Mortgage Market Index, an important indicator of the U.S. housing market's performance, recorded 224.0 as of December 18, 2024.

4. Major Mortgage Companies and Market Share

Various companies operate in the U.S. mortgage market, with the market shares of major companies as follows:

• Wells Fargo: One of the largest banks in the U.S., holding a significant share in the mortgage lending market.

• Bank of America: Provides a range of financial services and plays an important role in the mortgage lending market.

• Quicken Loans: Offers online mortgage lending services and is rapidly growing in the market.

In addition, many companies compete in the mortgage market, and market shares are continuously fluctuating.

5. Future Outlook for the Mortgage Market

In 2025, mortgage rates are expected to ease somewhat, but they may still pose a burden for home buyers. To revitalize the housing market, a reduction in rates, an increase in housing supply, and stabilization of home prices are necessary.

Moreover, as the digitization and automation of mortgage lending progresses, the application and approval processes are expected to become more efficient. This will provide better services to consumers and promote competition in the market.

The U.S. mortgage industry is a key part of the housing market, playing an important role in facilitating home ownership through the connection between home buyers and lenders. Various factors such as rate fluctuations, market trends, and competition among major companies impact the mortgage market, serving as crucial elements for the stability and revitalization of the housing market.

Efforts in various aspects such as rate policies, housing supply, and digitization will be necessary for the future development of the mortgage market, which will help promote sustainable growth in the housing market.