Welcome to our 2023 Homebuyer.com Home Mortgage Disclosure Act (HMDA) study.
Homebuyer.com is a mortgage lender for first time home buyers. In our annual home buyer study, we present mortgage data derived from the 16.1 million mortgage applications placed by American home buyers last year and the 100.6 million mortgage applications since 2018.
Our data source is the FFEIC, which collects mortgage application data from US lenders in accordance with Regulation C. The data is stripped of personally identifiable information, then sorted by race, gender, ethnicity and dozens of other criteria.
This article was initially published on June 29, 2023. It will be updated with new analysis by July 2023. The release notes and publication history are below:
- June 29, 2023: Initial publication date coincides with FFEIC HDMA data release date
- June 30, 2023: Updated with additional information from the 2022 Snapshot debt level data set
We encourage you to read our methodology and cite this study in research, websites, and news broadcasts. Please use proper attribution as described at the bottom of this article.
HMDA data for US home buyers
As part of our annual study, we answer basic questions about US homebuyers and their mortgages, including:
- How many home buyers applied for mortgages?
- How many mortgage applications were approved?
- How many mortgage applications were denied?
Next, we’ll look at secondary mortgage statistics such as:
- What was the mortgage approval rate by race?
- What was the average mortgage fee paid by gender?
- What was the average credit score for mortgages approved by ethnicity?
Finally, we create comparative mortgage statistics such as:
- Are men more likely to be approved for a mortgage than women?
- Do home buyers of different races get different mortgage rates?
- Do home buyers get different mortgage rates based on where they live?
Homebuyer.com writes our annual HMDA study to promote decency and fair dealing for first-time home buyers.
What is the Home Mortgage Disclosure Act (HMDA)?
HMDA is the short form of Home Mortgage Disclosure Act. Pronounced “HUM-duh,” the HMDA requires lenders to share data about the mortgage loans they do and don’t make.
The government’s HMDA Report is the most comprehensive public database for US mortgage market activity. This is an important fairness check on mortgage lenders and their dealings.
The Federal Financial Institutions Examination Council (FFIEC) and the Consumer Financial Protection Bureau (CFPB) regulate HMDA reporting. The agencies require lenders to file annual reports with comprehensive, loan-level details.
The entire HMDA dataset is 99 fields, which can be divided into five categories:
- borrower demographics
- credit worthiness of the borrower
- loan features
- property features
- creditor identity
This annual study begins with one general category, then expands into the five categories above to reveal the state of mortgage lending and mortgage market activity nationwide. The data is compiled from the HMDA Snapshot loan-level dataset available on the CFPB website.
Home Buyer Mortgage Statistics
How many mortgage applications do home buyers start annually?
How many mortgage applications do lenders approve per year?
How much does the typical home buyer shop for the lowest rate mortgage?
How many mortgage applications do lenders reject each year?
Mortgage Statistics by Borrower Demographics
The next part of our home buyer study focuses on borrower demographics.
Borrower demographics refer to specific characteristics of mortgage applicants, such as gender, race, ethnicity and age. We use HMDA data to measure purchase mortgage applications and their outcomes by demographic group.
To ensure a fair comparison between different demographics, we normalized and grouped HMDA records based on creditworthiness, which can be summarized as loan-to-value, loan-to-income and applicant credit score.
[Data and charts in review process for June 30, 2023]
Mortgage Statistics by Borrower Credit
The next part of our home buyer study focuses on the borrower’s creditworthiness.
The HMDA law requires lenders to report three data points associated with creditworthiness: applicant credit scores and debt-to-income ratios, and mortgage loan-to-value. These characteristics are also known as the 3Cs of a mortgage loan – debt, ability to repay, and collateral.
- Credit score measures the likelihood that an individual will make his or her loan payments on time.
- Debt-to-income ratio measures an individual’s available monthly cash flow
- Loan-to-value measures the size of the home buyer’s down payment
The data in this section shows how creditworthiness affects a home buyer’s chance of getting a mortgage approved.
[Data and charts in review process for June 30, 2023]
Mortgage Statistics by Loan Characteristics
The next part of our home buyer study examines loan characteristics.
HMDA regulations oblige lenders to provide 26 loan-level details on applications submitted by buyers, including mortgage type, loan amount and term.
- mortgage type whether the mortgage is a conventional loan, an FHA loan, a VA loan, or something else
- Loan amount is the amount that is borrowed to buy the house
- Loan term is the length of the mortgage loan, in years
We also include data comparing adjustable rate mortgages and fixed rate mortgages.
The mortgage statistics in this section show how loan characteristics can affect a home buyer’s mortgage approval and interest rate.
What types of mortgage loans do home buyers use?
What is the average mortgage loan size for a home buyer?
What is the mortgage loan size distribution for home buyers?
What is mortgage loan term distribution for home buyers?
Mortgage Statistics by Property Characteristics
In the property characteristics portion of our study, we look at how property descriptions play into mortgage statistics. These characteristics include the type, location and purpose of the property.
Type of property refers to the type of property for which the mortgage is sought. This can be a single-family home, a multi-family property, or a manufactured home. The type of property can affect the chances of loan approval and the interest rate offered.
Another aspect is the location of the property. This can be in a rural, suburban or urban area. Lenders may look at the location of the property when deciding whether to approve the mortgage. In some cases, they may offer different rates based on geography.
The purpose of the property also matters. The property can be a primary residence, a second home or an investment property. Lenders often offer different rates and approval criteria depending on the purpose of the property.
The next part of our HMDA study explores property characteristics and mortgage approvals.
HMDA regulations require mortgage lenders to enter details about their mortgage applications and the assets attached to the funding, including home value, property type and occupancy.
- The value of the house is the purchase price or the appraised value of the house, whichever is less
- Property type is the unit number of the property, ranging from 1-unit to multiple units
- Occupancy indicates whether the home is the buyer’s primary residence, second home or investment property
For the purposes of this home buyer study, we filtered HMDA records only for 1-4 unit homes purchased as a primary residence.
What percentage of home buyer mortgages are for primary homes, vacation homes and investment properties?
What is the distribution of 1-unit, 2-unit, 3-unit and 4-unit homes?
What is the average mortgage rate for a 1-unit, 2-unit, 3-unit and 4-unit home by loan size?
Mortgage Statistics by Lender Identity
In the Lender Identification part of our study, we explore the role of the lender in mortgage applications. Each lending institution has its own strategies, policies and practices. These factors can affect the approval rates, fees and interest rates they offer.
Lender identification is not about individual loan officers but about the institutions they work for. Lenders can range from large banks to small credit unions, and from traditional lenders to online-only platforms.
Some lenders may specialize in certain types of loans or cater to specific borrower demographics.
Understanding the roles and practices of lenders can provide valuable insight to potential home buyers. In this section, we analyze 2023 HMDA data to reveal the effect of lender identity on mortgage applications and approvals.
[Data and charts in review process for June 30, 2023]
procedure
The data for our study was gathered from the FFEIC website, specifically the Snapshot National Loan Levels dataset for 2018-2023. These snapshot files include the national HMDA dataset for all HMDA reporters as of April 30, 2022. The data was modified by the bureau to protect the privacy of the applicant and the borrower.
To keep our study focused, we filtered the data specifically for home buyers. We have removed mortgage applications for purposes other than buying a home, including home construction and refinancing. We limited the study to properties with 1-4 units. We filtered out open-end mortgages in first-lien status, including home equity line of credit (HELOC) mortgages, and excluded reverse mortgages from our analysis.
The HMDA record counts seven mortgage application results, which the LAR data field schema labels action_taken, We grouped the HMDA records according to action_taken as follows:
- Successful: Applications that resulted in financed mortgages
- Failed: Applications not approved by the mortgage lender
- Postponed: Application withdrawn by the home buyer or closed due to incompleteness
- Offer Rejected: Applications accepted by the lender but not accepted by the home buyer
Our analysis was done using database queries. This allowed us to efficiently sift through large datasets and extract the most relevant information. We have removed outlier data, which is mostly associated with mortgage applications that have been either withdrawn by applicants or rejected by lenders for incompleteness that is outside the normal and expected range.
Less than one-half of one percent of the HMDA was excluded for valid reasons.
Despite the completeness of the HMDA data, our study required additional calculations to answer more complex questions. Relative percentages and comparative figures were derived from more advanced calculations.
To ensure the accuracy of our study, we relied on the robustness of the HMDA data and the accuracy of our database queries. The rigorous process of data extraction, filtering and analysis contributed to the reliability of our results.
how to share your research
Homebuyer.com conducts our annual HMDA mortgage data research to help home buyers understand the mortgage market and promote decency and fair dealing for first-time home buyers.
Our detailed findings can be shared on social media platforms, personal blogs, online forums, or used in academic and professional presentations. However, we request that you adhere to the following attribution guidelines when doing so:
- Please include only the highlights of the study. Do not copy images or tables.
- You must include a link to the complete study on the Homebuyer.com website.
- You must link to this page URL using one of these three words: “Mortgage Statistics”, “HMDA Mortgage Data”, or “homebuyer.com”.
- Avoid misrepresentation by not changing our conclusions.
By sharing our HMDA mortgage data study and following these guidelines, we can work together to promote a fair and transparent mortgage lending environment for all home buyers.
For follow-up information and usage rights for our research, please email our team at hello@homebuyer.com. We’d love to help you do more with your data.
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