For Homebuyers With Limited Savings, PMI Offers Possible Path to Ownership 

An analysis of data from U.S. Mortgage Insurers (USMI) shows that private mortgage insurance (MI) helped more than 800,000 low downpayment borrowers qualify for home financing in 2024. 

Last year, homebuyers were forced to contend with constrained housing supply, high home prices, and elevated mortgage rates, but the report from U.S. Mortgage Insurers (USMI), 50 States of Low Down Payment Homebuying, highlights how hundreds of thousands of households across the country were able to become homeowners through low downpayment mortgages backed by private MI. 

According to Bankrate, the median home sales price has risen 20% in the past five years–around $70,000–and the average American now needs a household income of nearly $117,000 in order to afford a home. 

Since 2018, USMI has released an annual report examining how private MI helps bridge the downpayment gap and analyzes, at a state level, the borrowers who benefit from private MI. Low downpayment mortgages, including conventional loans backed by private MI, have proven critical for millions of borrowers to sustainably buy a home sooner, secure financial stability, and build wealth. 

“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 downpayments, while simultaneously serving as a robust safeguard against mortgage default, thereby reducing overall risk in both the housing and financial markets,” said Seth Appleton, President of USMI

According to 50 States of Low Down Payment Homebuying: 

  • More than 800,000 households in 2024 became homeowners using low downpayment mortgages backed by private MI–an increase from 2023. 
  • Sixty-five percent of purchasers with private MI in 2024 were first-time homebuyers. Nearly 35% had annual incomes below $75,000. 
  • The average loan amount for a home purchase backed by private MI in 2024 was $362,632. 
  • Saving for a 20% downpayment could take the typical potential homebuyer 27 years—nearly three times longer than the time to save for a 5% downpayment that is often used with private MI. 
  • As of the end of 2024, the industry insured nearly $1.6 trillion of mortgages, including $1.4 trillion of mortgages backed by the government-sponsored enterprises (GSEs), protecting the housing finance system and taxpayers from credit risk. 
  • The private MI industry has covered nearly $60 billion in claims for losses since the 2008 financial crisis. 

In its 68-year history, the private MI industry has enabled nearly 40 million people to access affordable low down payment mortgages. In 2024 alone, 65% of purchase loans backed by private MI went to first-time homebuyers, nearly 35% went to families with incomes below $75,000, and the average loan amount with private MI was $362,632. 

For the report, USMI analyzed how long it could take prospective buyers to save for a 20% cash downpayment plus closing costs at the national and state levels based on the personal saving rate, median household incomes, and median home sales prices. The average number of years to save 20% varies depending on where you live; prospective homebuyers in Washington, D.C. would have the longest wait time at 51 years, followed by Hawaii at 50 years, California at 49 years, Washington State at 37 years, and Montana at 35 years. Prospective homebuyers in Iowa had the shortest wait time at 15 years. USMI’s calculations were based on the median sales price for single-family homes, determined by Redfin data gathered in 2024, median household income in 2023 data from the U.S. Census Bureau (latest available), and personal saving rate data gathered from the Federal Reserve in 2024. 

USMI’s survey also found that there was a 6% increase in the number of Americans who viewed homeownership as important since its initial survey in 2021. Respondents viewed homeownership as a path to stability, financial security, and creating intergenerational wealth. The most recent Federal Reserve Survey of Consumer Finances found that the median net worth of renters was $10,400, compared to nearly $400,000 for homeowners. 

Click here for more on USMI’s 50 States of Low Down Payment Homebuying report. 

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Picture of Eric C. Peck

Eric C. Peck

MortgagePoint Managing Digital Editor Eric C. Peck has 25-plus years’ experience covering the mortgage industry. He graduated from the New York Institute of Technology, where he received his B.A. in Communication Arts/Media. After graduating, he began his professional career in New York City with Videography Magazine before landing in the mortgage finance space. Peck has edited three published books, and has served as Copy Editor for Entrepreneur.com.
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