This offering opened doors for first-time buyers, a new report says
Private mortgage insurance (MI) helped more than 800,000 borrowers in the United States purchase homes in 2024, according to a report released Wednesday by US Mortgage Insurers (USMI). The report highlights how low down payment options supported working families and first-time buyers in a housing market challenged by high prices, elevated interest rates, and limited inventory.
“For nearly seven decades, private MI has provided a dual benefit to the housing market: it creates homeownership opportunities for qualified borrowers—particularly first-time homebuyers—who lack substantial down payments, while simultaneously serving as a robust safeguard against mortgage default,” said Seth Appleton, president of USMI.
Key findings show affordability gains
The data shows that 65% of home purchase loans backed by private MI in 2024 went to first-time buyers. Nearly 35% of these borrowers had annual incomes under $75,000. The average loan size was $362,632.
The report also found that saving for a 20% down payment could take the typical buyer 27 years—three times longer than saving for a 5% down payment often paired with private MI. For families earning the national median income of $80,610, it would take 26 years to save for a 20% down payment on a median-priced $412,500 home. That timeline shrinks by 65% with a 5% down payment.
Texas once again led all states in the number of homeowners helped through private MI-backed loans.
A declining cost amid rising home expenses
Public data reveals that private MI costs have dropped 25% since 2017, measured by in-force premium yields. This decrease stands in contrast to rising costs across other parts of the housing market. The reduction is attributed to risk-based pricing models and savings from the 2017 Tax Cuts and Jobs Act, which were passed on to borrowers.
Support for the financial system
By the end of 2024, nearly $1.6 trillion in mortgages carried private MI coverage, including more than $1.4 trillion backed by government-sponsored enterprises (GSEs). Since the 2008 financial crisis, private mortgage insurers have paid nearly $60 billion in claims, shielding lenders and taxpayers from loss.
“Private MI offers an affordable, effective, and time-tested way to make mortgage credit available to low down payment homebuyers without increasing risk in the housing finance system,” the report noted.
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