The latest 2023 Home Mortgage Disclosure Act (HMDA) data is in, and it confirms a few key trend lines for the mortgage industry: there was significantly less interest in mortgage loans in 2023, and fewer banks thought it worth participating in the market.
The full dataset from Consumer Financial Protection Bureau (CFPB) and the Federal Financial Institutions Examination Council (FFIEC), includes information from 5,113 financial institutions, which encompass mortgage companies, banks, savings associations and credit unions. This is a 14.6% increase in the total number of reporting institutions when compared to the prior year, the CFPB stated.
“The HMDA data are the most comprehensive source of publicly available information on mortgage market activity,” the announcement said. “The data are used by industry, consumer groups, regulators, and others to assess potential fair lending risks and for other regulatory and informational purposes.
“The data also help the public assess how financial institutions are serving the housing needs of their local communities and facilitate federal financial regulators’ fair lending, consumer compliance, and Community Reinvestment Act (CRA) examinations.”
Alongside the full dataset is the Snapshot National Loan-Level Dataset, which contains national HMDA datasets as of May 1, 2024. It includes some more granular detail on attributes featured in the full dataset.
Despite the growth in the number of independent mortgage banks, the total number of applications is relatively low.
“The 2023 data include information on 10 million home loan applications, a decrease from the 14.3 million reported in 2022,” the CFPB said based on the snapshot. “Among them, 7.7 million were closed-end (e.g., a home mortgage loan) and 2.1 million were open-end (e.g., a home equity line of credit). Another 266,000 records are from financial institutions making use of statutory partial exemptions and did not indicate whether they were closed-end or open-end.”
Nonbank mortgage companies accounted for 68.8% of all “first lien, one- to four-family, site-built, owner-occupied home-purchase loans” last year, which marks an increase from the 60.2% figure recorded in 2022. The share of these loans serving Black borrowers rose by 0.1% to 8.2% in 2023, while Hispanic-White borrowers’ share grew from 9.1% to 9.9% in that same period.
In 2023, Black or African American and Hispanic-White applicants experienced denial rates of 16.6% and 12.0%, respectively. Denial rates for Asian and non-Hispanic-White applicants were 9.0% and 5.8%, respectively.
Other data products were also made available by FFIEC on Friday, including the HMDA Dynamic National Loan-Level Dataset which is updated “on a weekly basis to reflect late submissions and resubmissions,” the CFPB said.
Aggregate and disclosure reports also help to summarize data from individual financial institutions and geographic areas, while the HMDA Data Browser has user-control functionality allowing the creation of customized tables and maps.