CFPB Annual Report of 2021 Mortgage Market Activity Reveals an End to the Refinancing Boom and an Increase in Home Purchase Loans

WASHINGTON, D.C. — Today, the Consumer Financial Protection Bureau (CFPB) released its annual report on residential mortgage lending activity and trends for 2021. The report’s data are submitted by thousands of the nation’s lending institutions under the Home Mortgage Disclosure Act (HMDA). The report shows a shift from refinance loans in 2020 to home purchase loans in 2021, with a greater share of home purchase loans going to Asian, Black, and Hispanic white borrowers relative to the share of home purchase loans for non-Hispanic white borrowers. The top 25 closed-end lenders by loan volume held nearly half of the market share of residential mortgage lending – a trend that has risen each year since 2018.

The Home Mortgage Disclosure Act requires financial institutions to collect and report mortgage loan-level information on applications and originations. The data inform determinations as to whether financial institutions are serving the housing needs of their local communities. Additionally, the data facilitate the distribution of funds to local communities to help attract private investment, as well as to help identify possible discriminatory lending patterns and to enforce antidiscrimination statutes.

Key findings from this year’s analysis include:

• Increase in mortgage originations was driven by home purchase loans as refinance loans fell: Closed-end mortgage originations, excluding reverse mortgages, increased in 2021 by 2.4%, from 13.4 million in 2020 to 13.7 million. While the 66.8% increase in originations from 2019 to 2020 was largely driven by refinances, most of the increase from 2020 to 2021 was due to jumbo home purchase loans. In fact, non-cash-out refinance loans began decreasing following a peak in March 2021.
• The number of mortgage lending institutions reporting HMDA data dropped in 2021: At least one closed-end mortgage loan had been reported by 4,332 financial institutions, down by 3.1% from 4,472 financial institutions in 2020. The top 25 closed-end lenders by loan volume held a combined market share of 43.9%, which has risen yearly since 2018. The top 25 mortgage lenders by loan volume were particularly prominent in the refinance market, accounting for 53% of all refinance loans.
• Asian, Black, and Hispanic white borrowers’ home purchase loan shares increased from 2020 to 2021: Black borrowers’ share of home purchase loans increased from 7.3% in 2020 to 7.9% in 2021. Hispanic white borrowers saw their share of home purchase loans increase from 9.1% to 9.2%, and Asian borrowers’ share increased from 5.5% in 2020 to 7.1% in 2021. The share of non-Hispanic white borrowers’ home purchase loans decreased from 59.1% to 55.6% during the same time period. Black and Hispanic white borrowers, overall, continued to qualify for lower median loan amounts, had lower median credit scores, and had higher denial rates compared to non-Hispanic white and Asian borrowers. Additionally, Black and Hispanic white borrowers paid higher median interest rates and higher total loan costs overall.

This is the fourth year that HMDA data reflects changes implemented by the 2015 HMDA rule. The 2015 HMDA rule updated institution and transaction report criteria, and revised the data points that covered institutions must report.

Consumers can submit complaints about mortgage or refinance issues, or about other financial products or services, by visiting the CFPB’s website or by calling (855) 411-CFPB (2372).

The Consumer Financial Protection Bureau is a 21st century agency that implements and enforces Federal consumer financial law and ensures that markets for consumer financial products are fair, transparent, and competitive. For more information, visit www.consumerfinance.gov.

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