US Mortgage Lenders Losing Money Amid High Housing Prices and Cash Buyers

US banks are experiencing financial losses on mortgages for the first time on record, with an average loss of $301 per loan originated in 2022, according to a report by the Mortgage Banker's Association. The report attributes the losses to surging mortgage rates, low housing inventory, and affordability challenges. The cost of financing loans has also increased, leading to a decline in mortgage demand from buyers. The Federal Reserve Bank of Dallas has warned of a potential 19.5% decline in home prices this year, raising concerns of a housing bubble.