Meanwhile, the cost of financing a loan has gone up, as the decline in workers isn’t fast enough to make up for the decline in business. Banks and mortgage companies spent an average of $10,624 to finance each home loan in 2022, which represents a 23% cost increase from 2021.

“The rapid rise in mortgage rates over a relatively short period of time, combined with extremely low housing inventory and affordability challenges, meant that both purchase and refinance volume plummeted,” Walsh said. “The stellar profits of the previous two years dissipated because of the confluence of declining volume, lower revenues, and higher costs per loan.”

The US housing market may see a huge correction, some experts said last year, as the shrinking demand leads to a drop in home prices. Home prices could fall by 9% this year, one MBA board member previously said. Other experts have predicted a milder correction, with one National Association of Realtors economist predicting that prices had already bottomed out, and the housing market could see a rebound.