2017 Mortgage Market Activity and Trends
80 Pages Posted: 27 Nov 2018
Date Written: May 1, 2018
This Data Point provides an overview of residential mortgage lending in 2017 based on data reported under the Home Mortgage Disclosure Act of 1975 (HMDA). HMDA is a data collection, reporting, and disclosure statute that was enacted in 1975. HMDA data are used to assist in determining whether financial institutions are serving the housing needs of their local communities; facilitate public entities’ distribution of funds to local communities to attract private investment; and help identify possible discriminatory lending patterns.
The Bureau has created a static loan-level 2017 HMDA data file which consolidates data from individual reporters. That file and this Data Point reflect the data as of April 18, 2018. This Data Point summarizes the 2017 HMDA data and recent trends in mortgage and housing markets. Some of the key findings are as follows:
• The number of institutions reporting in 2017 fell 13.5 percent from 2016 (from 6,762 to 5,852). This is partly due to the increase of the reporting threshold from one to 25 covered originations for depository institutions.
• For loans secured by one- to four-family properties, home-purchase originations increased from 4.0 million in 2016 to 4.2 million in 2017, while refinance originations showed a significant drop from 3.8 million in 2016 to 2.5 million in 2017. In sum, the number of mortgage originations in 2017 declined 12.4 percent, from 8.4 million in 2016 to 7.3 million in 2017.
• Home-purchase originations continued on the upward trend which has been underway since 2011. The number of first-lien, owner-occupied home-purchase originations increased to 3.7 million in 2017—the highest level since 2007.
• Black borrowers increased their share of home-purchase loans for one-to-four-family, owner-occupied, site-built properties in 2017, the fourth consecutive annual rise for this group. The HMDA data indicate that 6.4 percent of such loans went to black borrowers, up from 6.0 percent in 2016. In contrast, 8.8 percent went to Hispanic white borrowers, unchanged from 2016.
• Not adjusting for inflation, the average size of first-lien, site-built home-purchase loans secured by one- to four-family, owner-occupied properties rose 3.9 percent in 2017, to $267,000.
• The shares of borrowers of all groups using nonconventional loans continued to decrease from the years immediately after the Great Recession. Black and Hispanic white borrowers continued to be much more likely to use nonconventional loans (that is, loans with mortgage insurance from the Federal Housing Administration (FHA) or guarantees from the Department of Veterans Affairs (VA), the Farm Service Agency (FSA), or the Rural Housing Service (RHS)) than conventional loans compared with other racial and ethnic groups.
• The share of mortgages originated by nondepository, independent mortgage companies has increased sharply in recent years. In 2017, this group of lenders accounted for 56.1 percent of first-lien, owner-occupied, site-built home-purchase loans, up from 53.3 percent in 2016.
Note: This is another in an occasional series of publications from the Bureau of Consumer Financial Protection’s Office of Research. These publications are intended to further the Bureau’s objective of providing an evidence-based perspective on consumer financial markets, consumer behavior, and regulations to inform the public discourse.
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