For full transparency, a press release is provided below.
BOSTON. Delayed demand due to the pandemic, low interest rates and a shortage of real estate have created a booming housing market with near-record refinancing rates.
Although the value of typical homes is up 15% from last year, the housing market in many cities is expected to remain hot for the rest of the year and next year.
According to the latest mortgage data from Housing Mortgage Disclosure Actin 2020, 12.1 million mortgage loan applications were approved with an overall approval rate of 83.6%.
The approval rates for mortgage loans depend on the purpose of the loan. Refinancing applications for conventional single family loans without cash repayment options had the highest approval rate at 86.9%.
Home loans had an almost identical approval rate at 86.3%, while cash-back refinancing applications were slightly less likely to be approved, with an approval rate of 84.9%. Compared to these types of loans, home improvement loans were the least likely to be approved – only 61% of home improvement loans were approved in 2020.
The approval rate for a mortgage application depends not only on the purpose of the loan, but also on the demographic characteristics of the applicant, including race and ethnicity.
Co-applicants of different races (“joint”) and white non-Hispanic applicants had the highest loan approval rates, both at 86.1%. Blacks, American Indians or Alaska Natives, and candidates from two or more minorities received the lowest approval rates, ranging from 65.8% to 69.4%.
The loan approval rate for Hispanics or Hispanics was 74.8%, higher than that of other minority groups, but still 11 percentage points below the approval rate for white borrowers.
Differences in loan approval rates are partly due to differences in loan profiles and application types by race and ethnicity.
Members of minority groups are more likely to have lower incomes, lower credit ratings, and live in economically disadvantaged areas.
However, studies point to persistent discrimination in the lending market and that, even with differences in financial position, minorities are denied loans at higher rates than their white counterparts.
Approval rates are highest in the Midwest, while they tend to be lower in the South and Southeast. This is likely due to differences in local demographic composition and socioeconomic status. Residents of North Dakota and South Dakota (90.6% and 90.1%, respectively) experienced the highest credit approval rates in the country. At the other end of the spectrum, residents of Mississippi and Florida experienced the lowest loan approval rates at just 74.7% and 77.1%, respectively.
To find the places with the highest loan approval rates, Smartest Dollar researchers analyzed the latest data from the Federal Financial Institutions Examination Board. Housing Mortgage Disclosure Act, US Census Bureau and Zillow. The researchers ranked the states according to their mortgage approvals. The researchers also calculated the total number of loan applications approved, the average home value, the average household income, and the minority share, defined as the percentage of the population that is not white, non-Hispanic.
The analysis found that 86.9% of mortgages were approved in Massachusetts in 2020, up from 83.6% nationally.
Of all the US states, Massachusetts ranks 14th in the number of approved loans.…
Here is a summary of the data for Massachusetts:
- Mortgage approval speed: 86.9%
- Total approved loan applications: 316,008
- Average house price: USD 508,232
- Average household income: USD 85,843
- Minority share: 29.7%
For your reference, here are the statistics for the entire United States:
- Mortgage approval speed: 83.6%
- Total approved loan applications: 12 107 353
- Average house price: USD 287,148
- Average household income: USD 65,712
- Minority share: 40.0%
For more information, detailed methodology and full results, you can find the original report on the Smartest Dollar website: https://smartestdollar.com/research/cities-with-the-highest-loan-approval-rates-2021