Urban Wire Despite progress, minority borrowers still lag behind in the housing recovery
Bing Bai, Sheryl Pardo, Karan Kaul
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Media Name: ap_minority-borrowers.jpg

The latest residential mortgage lending data show that the housing market still has a long way to go before it’s back to normal, despite clear signs of recovery. Experts at a recent Urban Institute forum discussed this and other revelations from the recently released Home Mortgage Disclosure Act data (HMDA) on 6 million loans made in 2014. The new data have also been added to our interactive map that now shows 14 years of mortgage originations by race and ethnicity, from 2001 to 2014.

The leading analysis of the HMDA data showed that mortgage refinances declined 50 percent in 2014 as interest rates rose, while purchase loans increased slightly, according to Neil Bhutta, one of the main authors. His presentation examined whether the Ability to Pay (ATR) and Qualified Mortgage (QM) rules, or Home Ownership and Equity Protection Act (HOEPA) changes had any impact on mortgage lending in 2014. While there was little evidence that the ATR and QM rules slowed lending, lending dropped sharply at the HOEPA pricing threshold. Bhutta’s research also confirmed that nonbanks’ share of overall originations rose further in 2014 even though nonbank lending was slightly more expensive for borrowers than lending from traditional banks.

Sam Khater, deputy chief economist at CoreLogic explained its methodology for estimating mortgage originations with a much shorter lag than HMDA. Based on public records, CoreLogic’s data closely parallel the HMDA data in 2014, and also show that purchase mortgage volume continued to rise in the first half of 2015, up 12 percent year over year.

At the forum, we unveiled the update to our interactive map that illustrates how minority borrowers still lag behind in the post-crisis recovery. For example, the DC metro area saw a sharp drop in minority lending from 2006 to 2014.

DC lending

Minority households were locked out of the post-recession recovery partly due to the tight lending standards as they tend to have lower income and weaker credit profiles. More recently, some progress has been made to open up the credit box and our credit availability index shows that access to credit has started to slowly increase since late 2013.

Minority borrowing


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The Urban Institute podcast, Evidence in Action, inspires changemakers to lead with evidence and act with equity. Cohosted by Urban President Sarah Rosen Wartell and Executive Vice President Kimberlyn Leary, every episode features in-depth discussions with experts and leaders on topics ranging from how to advance equity, to designing innovative solutions that achieve community impact, to what it means to practice evidence-based leadership.


Research Areas Race and equity Housing finance
Tags Inequality and mobility Structural racism
Policy Centers Housing Finance Policy Center