One more indicator that the housing market is on a shaky foundation: Banks are now losing money on mortgages. In a new report from the Mortgage Bankers Association (MBA) released this week, it’s said that independent mortgage banks and subsidiaries of chartered banks had record low profits throughout 2022.

In fact, financial institutions lost an average of $301 per loan they finalized in 2022 — in stark contrast to the $2,339 profit per loan that was reported in 2021 — equating to a 113% decrease, per Business Insider. The MBA noted this is the first time it’s seen profits in the red since reporting began in 2008.

It’s yet another result of a very tenuous housing market in which there aren’t many available properties. Buyers and sellers are both holding out with interest rates soaring, now nearly double the 2-3% fixed APR the market had seen in recent years.

As Business Insider detailed: “Banks and other mortgage companies each financed an average $2.6 billion in loans in 2022, roughly half the $5 billion figure for 2021.” As well, the cost to finance a loan has gone up significantly, increasing by 23% over 2021.

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