Home loan applications in 2023 were down 30% – from 14.3 million in 2022 to 10 million – according to new home lending data released Thursday. However, the share of home purchase loans to Black, Asian and, especially, Hispanic-White borrowers rose last year.
According to Home Mortgage Disclosure Act (HMDA) data on 2023 mortgage lending transactions released by the Federal Financial Institutions Examination Council (FFIEC), even though the number of transactions declined, the number of financial institutions reporting increased by about 14.6% from 2022 (from 4,460 to 5,113 last year).
Among total loan applications, the HMDA data show, 7.7 million were closed-end (what are termed “home mortgage loans”) and 2.1 million were open-end (home equity lines of credit).
Additionally, the report noted that another 266,000 records are from financial institutions making use of statutory partial exemptions and do not indicate whether they were closed-end or open-end.
Meanwhile, mortgages originated by mortgage companies were up, the data show. Non-depository, independent mortgage companies accounted for 68.8% of first lien, one- to four-family, site-built, owner-occupied home-purchase loans in 2023, up from 60.2% in 2022, the data show.
As for race and ethnicity, the HMDA data show the share of closed-end home purchase loans for first lien, one- to four-family, site-built, owner-occupied properties made to Black or African American borrowers rose slightly from 8.1% in 2022 to 8.2% in 2023. The share made to Asian borrowers increased slightly from 7.6% to 7.7%, according to the data.
However, the share made to Hispanic-White borrowers increased from 9.1% to 9.9%.
As for denial rates, Black and Hispanic-White applicants saw higher rates. For first lien, one- to four-family, site-built, owner-occupied conventional, closed-end home purchase loans, Blacks experienced a denial rate of 16.6% and Hispanic-Whites, 12.0%.
Denial rates for Asian and non-Hispanic-White applicants were 9.0% and 5.8%, respectively, according to the HMDA data.