While certain aspects of COVID-19 appear to be behind us, the pandemic created several economic challenges that continued throughout 2022. Inflation, which reached its highest point in 40 years, remained a concern for policymakers as well as American households. Central banks responded by aggressively increasing interest rates, creating multiple economic challenges. First, the rise in interest rates, and anticipation of additional rate hikes, contributed to significant declines in both the U.S. equity and bond markets. In addition, mortgage rates reached a 20-year high, and relatively strong household and corporate balance sheets, created by increased savings during the pandemic, started to feel the stress of both rising prices and interest rates. But despite this significant uncertainty, our initial metrics reveal that participant retirement plan behaviors remained largely unaffected.
While average account balances decreased by 20% in 2022, primarily driven by negative market performance, participant behaviors mostly remained positive. Nearly 4 in 10 participants increased their deferral rate (either on their own or as part of an automatic annual increase), in line with previous years. The proportion of participants in professionally managed allocations increased to 66%, and 79% of participants maintained a balanced strategy, up slightly from 78% in 2021. And against a challenging market environment with increased volatility, only 6% of nonadvised participants traded, the lowest point in 20 years.
Loan issuances increased slightly in 2022, and while non-hardship withdrawals were similar to 2021, hardship withdrawals increased moderately, perhaps signaling that some households were facing financial stress. However, recent legislation has made it easier for participants in hardship to access assets; and as automatic enrollment continues to enroll a larger percentage of the workforce, especially those with lower income, a modest increase in hardship withdrawals is not entirely surprising. And it is important to note that more than 97% of participants did not take a hardship withdrawal during this challenging year. This data underscores that participants are generally resilient and maintain a long-term approach to retirement savings, even during uncertain economic times.