HMDA 2010 Shows Mortgage Market Continued Decline

Last week we released the new 2010 Home Mortgage Disclosure Act, or HMDA, data on PolicyMap, and it confirms many of the intermediate predictions we’ve seen throughout the year of further decline. Among various mortgage loan products available to consumers, a consistent trend has emerged over the past few years: an uptick in 2009 with a decline in 2010. According to the 2010 Federal Reserve Bulletin article, “The Mortgage Market in 2010: Highlights from the Data Reported under the Home Mortgage Disclosure Act,” the dip was caused by the June closing deadline for the First-Time Homebuyer Tax Credit (which was extended to September). Considering only the number of originations made, or total volume, we can see the uptick in 2009 and subsequent depression in 2010:

And considering refinance loans, which surged in 2009, we see a decline in 2010, as well:

And finally, looking at government-insured loans, which came to make up more than half of the mortgage lending activity in 2009 due to the collapse of the subprime market, we can see the rise in 2009, accompanied by the fall in 2010.

Though the volume of lending has significantly decreased, the Federal Reserve Bank says that loan denial rates remained approximately the same in 2009. This indicates that demand is indeed down, regardless of approval rates.

With PolicyMap, you can see how these trends are reflected in your area of interest. Users can access HMDA data in the “Lending Activity” tab on PolicyMap.

Stay tuned in the next few weeks for our release of the 2010 Federal Reserve Bank’s customized HMDA calculations that include multifamily loans, home improvement loans, and loans by borrower and tract income.