Understanding the 2025 Home Mortgage Disclosure Act data

All right, so I wanna talk with you today about the r- fair- relatively recent release of HMDA data for the previous year, and some of the trends that the econ team here at ABA is seeing in the data, and how that's gonna affect bank participation in the mortgage market going forward.

Can you give us an overview of the high-level trends you saw in the HMDA data, and then we can drill down into some specific questions.

Absolutely.

So the HMDA data, every time that there's a application done in terms of a mortgage applied, there's a lot of different data points that need to go ahead and be filed to the government, and one of the things about the HMDA data set is it really does give us a bird's-eye view about what's going on in this financial landscape.

So we're able to see directly how banks are competing with their non-bank competitors.

And so within that, within the most recent data, with the, with 2025, is that banks made up about 51% of the filers within the data set, but they only originated 29% of the loans within HMDA data.

And there's a lot of reasons for that, that we could kinda go through, and I'd probably ballpark it and say that market share has basically been cut a little bit more than half over the last 15 or 20 years or so.

And definitely the higher capital requirements following the great financial crisis is a big contributor.

Also, the number of data points that are required in HMDA has gone up significantly.

That really last happened in 2018, and the ABA actually is doing some initiatives to try to reduce those amount of data points, to try to make it less burdensome for especially smaller banks to file that data on an annual basis.

But the other thing you have to remember too is that competition is a little bit more nuanced too.

And I'll give you an example in regards to mortgage companies, is that they don't take deposits, they don't have access to liquidity facilities, so a lot of times those mortgage companies are actually getting their financing from, from banks.

And so trying to figure out what the banking industry's total contributions to the housing market can be a little bit difficult to unfurl.

Another great example of that too is that banks end up making loans to home builders, and that home builder will go ahead and build the home, but then they also might have their own in-house mortgage company where they're going ahead and lending to that home buyer.

And so ultimately you peel it back and realize that that would not have been possible without the loans that banks are making to the home builders in those situations.

So trying to figure out, eye in the sky, what the total dollar amount of the bank's contributions to the housing market can be relatively difficult, but I think maybe a big takeaway for our audience here is that banks are making a myriad of contributions through a variety of ways, whether it be the direct originations, or it'll be facilitating to home builders, to mortgage companies.

There's all these different ways that banks are making contributions to the housing market.