The release of 2020 Home Mortgage Disclosure Act data provide an opportunity to look at the local mortgage lending environment – trends in loan volume, the kinds of loans being made, where loans are made, how efficiently different groups can access credit, and how key features of originated mortgages vary across different racial groups in Philadelphia.
Findings from an analysis of these data suggest that overall home purchase originations in Philadelphia continue to steadily increase over the last several years, origination rates have steadily increased to their highest levels in a decade, and FHA/VA market share in the home purchase market has stabilized around 29-30%. And the low interest rate environment has led to a rapid rebound of the refinance market, which has returned to levels not seen in over a decade.
Despite these encouraging signals for the mortgage market overall, substantial disparities remain between different borrowers and neighborhoods throughout the city in terms of their access to mortgages, and in the costs of the mortgage products they do obtain. In addition, large swaths of the Philadelphia housing market are increasingly transitioning to investor dominated, cash-markets, that may potentially crowd out prospective borrowers in the cities most affordable markets.
The disparate experiences of individual borrowers and communities observed in the 2020 HMDA data, even after controlling for borrowers’ creditworthiness and income, calls out for a closer examination of the extent to which illegal discrimination continues to impact the city’s mortgage markets.