The Consumer Financial Protection Bureau’s most recent annual report on residential mortgage lending activity 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 agency reported today.
Closed-end mortgage originations, excluding reverse mortgages, increased by 2.4%, from 13.4 million in 2020 to 13.7 million in 2021, according to the report. CFPB previously reported a 66.8% increase in originations from 2019 to 2020, largely driven by refinances. However, most of the increase from 2020 to 2021 was due to jumbo home purchase loans. The number of refinance loans decreased year-over-year by 1.7%.
Black borrowers’ share of home purchase loans increased from 7.3% in 2020 to 7.9% in 2021, according to CFPB. 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% to 7.1%. 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.