Part 4 of this series examines mortgage lending patterns across several key metropolitan areas. These metros represent diverse regions throughout the United States, from major financial centers to mid-sized cities, providing important insights into regional variations in lending practices and homeownership opportunities. This article will focus primarily on home purchase lending, where lending drives investment in new areas and the potential to expand homeownership in these cities.
Jason Richardson, Senior Director, Research
Resources
For the complete series, including videos, interactive visualizations and localized market analysis, visit our 2025 Mortgage Market series homepage. NCRC members can request customized community data requests as well. Those interested in membership benefits should contact Ralph Cyrus (Membership Engagement Specialist) at rcyrus@ncrc.org.
Key Takeaways
There are a few clear observations across most of the metros that we look at in this article. The rise of Hispanic homebuyers, the decline of LMI lending and the stagnation of Black home lending gains are almost universal. However, each city also shows a mixture of affordability and inclusion challenges.
1
Southern Metros Are Seeing the Best Results on Racially Equitable Lending Of Any Region. The South consistently outperforms other regions in serving minority borrowers, averaging 30.3% lending to majority-minority communities versus just 14.9% in the Midwest. Cities like Jackson, Mississippi achieve 32.5% Black lending rates that approach demographic parity, while Tampa, Florida reaches 28.1% Hispanic lending that exceeds population share.
2
Expensive Coastal Markets Systematically Exclude People Based on Income, Not Just Race. Los Angeles manages only 5.2% low-income lending and 3.9% Black lending (despite the area’s 6.43% Black population), while San Francisco achieves just 12.4% low-income lending. These markets effectively reserve homeownership for high earners regardless of local demographics.
3
Geographic Location Determines Housing Access More Than Individual Circumstances. Regional affordability creates vastly different homeownership opportunities: Midwestern metros achieve 36.1% working-family lending while Western metros average just 16.9%. Where you live matters more than who you are, when it comes to your homeownership opportunities. The same family faces dramatically different prospects depending on metro location.
Evolving Loan Purposes for the 2018-2024 Period
The mortgage lending landscape across many metros has undergone a dramatic change since 2018, reflecting both the mortgage market’s volatility and recent structural shifts in the financial services industry.
Three Distinct Market Phases
The data reveals three distinct phases across all metros: pre-pandemic stability (2018-2019), a pandemic-driven refinance boom (2020-2021) and post-pandemic contraction (2022-2024). Before COVID, the focus was on recovering from the Great Recession. When the pandemic hit, global financial regulators slashed interest rates to historic lows to prevent economic collapse. The housing market, heavily dependent on financing, experienced dramatic changes from these unprecedented low rates combined with rising property values.
This created a stark divide: existing homeowners with massive financial gains as their property values soared, while renters and potential buyers faced much higher barriers to entry as prices outpaced income growth. What was once a challenging but achievable goal for many Americans has become financially impossible for a growing portion of the population, with many now believing homeownership is permanently out of reach.
However, the severity of these cycles varied substantially in different regions of the country.
Regional Variation in Market Cycles
Western metros experienced the most extreme lending volatility of any metro region, reflecting unprecedented home equity gains during the pandemic. The Los Angeles-Long Beach-Anaheim metro area saw total lending peak at 506,000 loans in 2020 before contracting to just 114,000 by 2024 (a 77% decline). San Francisco and Seattle show similarly extreme cycles.
In contrast, northeastern metros demonstrated greater lending stability. The Buffalo-Cheektowaga metro area shows the smallest decline in overall lending volume from its peak (-41%) compared to the national average (-67%), reflecting more moderate home price appreciation having occurred during the boom years.
The Great Equity Extraction Shift: From Refinancing to Home Equity Lending
The dramatic changes in lending patterns across metro areas tell a story of homeowner wealth extraction adapting to rising interest rates. In 2020, when rates hit historic lows, refinancing dominated the market as homeowners across expensive metros used cash-out refinances to access their rapidly growing home equity. Los Angeles saw refinancing represent 79.2% of all loans while San Francisco reached 77.9%, levels that reflected homeowners’ ability to tap massive equity gains through favorable new mortgages.
As interest rates doubled by 2024, this equity extraction strategy became unworkable. Refinancing shares collapsed to around 25-30% in these same Western metros, but homeowners didn’t stop accessing their wealth. They shifted to alternative methods. Home equity lending surged as families sought ways to access accumulated wealth without sacrificing their low-rate primary mortgages.
Regional Differences in Equity Access Patterns
The transition varied dramatically by region and represented a fundamental shift in which types of institutions serve existing homeowners who are seeking to access wealth. While mortgage companies dominated the refinancing boom, banks and credit unions lead on home equity lending, creating different access patterns across communities.
Western metros that experienced the most extreme home price gains saw the sharpest refinancing collapses but also the strongest pivots to home equity products. San Francisco’s refinance volume dropped by 93% from 2020 levels, falling from 189,000 loans to just 13,000 loans. Los Angeles saw refinance volume fall by 91%, declining from 401,000 loans to 36,000 loans. These homeowners increasingly turned to home equity lines and second mortgages offered by banks and credit unions to access wealth while preserving their sub-4% primary mortgages.
Midwestern metros showed more balanced patterns throughout the cycle. Detroit experienced a 58% volume increase in home equity lending, with home equity’s share of the total market jumping from 6.0% to 24.0% of all loans by 2024. Cleveland and Cincinnati maintained steadier lending volumes overall. The region’s strong presence of community banks and credit unions may have facilitated homeowners’ transition to equity-based products.
Southern metros showed varied responses. Tampa experienced a 36% volume increase in home equity lending, with home equity loans growing from 7.1% to 20.3% of the market, an increase of 13.2 percentage points.
Wealth Implications of Regional Equity Patterns
These lending pattern shifts reveal how dramatically homeowner wealth creation and access varies by geography and institutional relationships. Families in expensive Western metros accumulated unprecedented equity during the pandemic boom. This wealth remains accessible through bank and credit union home equity products even as refinancing became uneconomical. This represents a fundamental wealth divide: homeowners in appreciating markets built substantial assets, while renters and potential buyers found themselves increasingly priced out.
The counter-cyclical growth in home equity lending demonstrates how homeowner wealth has become a crucial economic cushion in high-cost areas, providing financial flexibility unavailable to non-homeowners. The shift from mortgage company-dominated refinancing to bank and credit union-led equity products also highlights how institutional relationships shape homeowners’ ability to access accumulated wealth across different market conditions.
Home Purchase Lending: Regional Patterns in LMI Lending and Loan Costs
The cost of buying a home has risen dramatically across the 32 metropolitan areas shown in the map below since 2020, but the changes hit different regions in vastly different ways. While all homebuyers face higher costs today, where you end up buying determines whether those increases feel like a steep hill or an insurmountable mountain.
Understanding who can still access homeownership despite these rising costs requires looking at low- and moderate-income (LMI) borrowers, in particular those earning 80% or less of their area’s median income. These working families, which include teachers, firefighters and retail workers, represent the backbone of local communities. Their ability to buy homes signals whether a region maintains economic diversity or is becoming a place where homeownership is exclusive to high earners.
Northeastern Region
Northeastern metros experienced steady cost increases that tracked closely with national patterns. Closing costs rose by about half since 2020, from $6,905 to $10,401, while interest rates more than doubled.
But what sets the Northeast region apart is how borrower incomes kept pace with these increasing costs across regions. While homes became more expensive, the people buying them saw their incomes grow substantially, providing some buffer against rising costs.
This income growth helps explain why the Northeast maintains above-average lending to LMI borrowers, with 25.1% of loans going to working families compared to 23.7% nationally. Hartford, Connecticut leads the region with nearly half its loans going to LMI borrowers, while smaller metros like Pittsburgh and Buffalo, New York maintain strong LMI lending at a rate of 36%.
The stark exception is the New York City metro, where only 14.9% of loans went to LMI borrowers, suggesting that even with increased levels of income growth, the nation’s most expensive metro increasingly serves only high earners.
Midwestern Region
The Midwest region remains America’s most affordable region for homebuyers, although “affordable” has taken on new meaning in recent years. While closing costs increased from $4,305 to $6,362, they remain thousands of dollars below what buyers face in coastal markets. A family buying in Detroit or Cleveland pays significantly less upfront than a family in San Francisco or Seattle.
This relative affordability translates directly to increased economic opportunities for working-class families. Midwestern metros currently have a 36.1% LMI lending rate, far exceeding any other region and well above the national average. All four major Midwest metros maintained LMI lending above a 33% rate, with Cleveland and Cincinnati leading at nearly 38%. This means that more than one in three homebuyers in these metros are working families earning moderate incomes. The region’s stability comes partly from slower population growth, which keeps competition less fierce than in booming Southern markets, allowing local workers to still compete for homes.
Southern Region
Data on southern metros tell a story of rapid evolution. Once known for affordability, these markets saw the steepest closing cost increases of any region, nearly doubling in just four years. This dramatic shift reflects the massive population influx to cities like Austin, Texas, Nashville, Tennessee and Tampa, where competition for homes intensified as remote work allowed people to relocate.
The impact on LMI borrowers varies dramatically within the region. Traditional Southern cities like Birmingham, Alabama, Richmond, Virginia and Baltimore maintained strong LMI lending above a 32% rate, preserving opportunities for working families. However, the booming metros tell a different story. Tampa’s LMI lending dropped to just 16.8%, while Austin and Nashville hover near the national average of 23.69% despite their historical affordability. This split reveals how rapid growth and newcomer competition can quickly transform a market from accessible to exclusive.
Western Region
Western metros present the starkest affordability challenges in the nation. Closing costs alone now exceed what many Americans pay for a car, creating a formidable barrier to entry for new buyers. These markets were already expensive in 2020, but the subsequent increases pushed costs to extraordinary levels.
The impact on LMI borrowers has been severe. Western metros only average a 16.9% LMI lending rate, far below the national average. The California metros paint a particularly stark picture, with Los Angeles landing at 5.2%, San Francisco at 12.4% and Sacramento at 13.8%. In these markets, even families earning 80% of an area’s median income find themselves priced out of the local housing market. While some Western metros maintain a moderate level of LMI access – Utah metros like Ogden and Salt Lake City exceeded 25% – these were rare exceptions. The Western experience shows how extreme costs create markets where homeownership becomes a privilege reserved for high earners, fundamentally changing a community’s composition.
Neighborhood Home Purchase Lending Patterns
The geography patterns of mortgage lending reveal a striking change when it comes to who buys homes in different types of neighborhoods. Two key neighborhood categories help us understand these patterns: Low- and Moderate-Income Census Tracts (LMICTs) are areas where median incomes fall below 80% of the regional average. Majority-Minority Census Tracts (MMCTs) are neighborhoods where racial and ethnic minorities comprise more than half the population.
Our findings on these neighborhood patterns require some important context. Changes to the 2020 census boundaries increased the number of MMCTs by 30% nationally, reflecting America’s growing diversity. This means some of the increases in MMCT lending comes from neighborhoods newly classified as majority-minority, rather than indicating increased lending in preexisting diverse areas.
The Disconnect Between Neighborhoods and Buyers
Nationally, only 23.7% of loans went to LMI borrowers in 2024, with 21.7% of those loans being made in low- and moderate-income neighborhoods. This near parity might seem unremarkable, but it masks dramatic regional variations that reveal changing neighborhood dynamics.
The most striking pattern emerges in expensive Western metros. San Francisco exemplifies this disconnect with only 12.4% of loans going to LMI borrowers even though nearly 25% of those loans were made in LMICTs. Los Angeles shows an even starker gap, with just a 5.2% LMI borrowing rate but 18.8% of loans being made in LMICTs.
This pattern indicates that higher-income buyers are increasingly purchasing homes in traditionally working-class neighborhoods, fundamentally altering these communities’ character.
Regional Patterns in Neighborhood Transformation
Northeastern Region
Northeastern metros generally show alignment between borrower incomes and neighborhood characteristics. Most cities maintained similar percentages of LMI borrowers and LMICT lending, suggesting that lender activity in working-class neighborhoods still largely serves working-class buyers. The exception is New York City, where expensive housing pushes all buyers into a wider range of neighborhoods, creating more mixing across income levels.
The region’s MMCT lending averages 25.3%, which falls below the national average of 29.6%. New York City stands out with 33.6% of loans being made in majority-minority neighborhoods, while Pittsburgh lands at just 3.7%, highlighting the region’s lending diversity.
Midwestern Region
Midwestern metros maintained the strongest connection between neighborhood income levels and buyer incomes. With a 36.1% LMI borrowing rate and a 23.7% LMICT lending rate, these metros show that lower-income buyers can still access homes throughout the market, not just in lower-income neighborhoods. Detroit exemplifies this pattern with robust lending across all neighborhood types.
MMCT lending in the Midwest averages just 14.9%, the lowest of any region. This reflects both demographic patterns and the reality that Midwest metros remain less diverse than coastal areas. This pattern is changing as Latino and Asian populations grow in cities like Milwaukee and Cincinnati.
Southern Region
Southern metros displayed the most varied patterns, reflecting the region’s diverse cities and rapid change. Tampa stands out due to a troubling trend: While only 16.8% of borrowers are LMI, 28.8% of loans occur in LMICTs. This 12-point gap suggests significant displacement pressure in traditionally affordable neighborhoods.
The South leads in MMCT lending at 30.3%, slightly above the national average, with Austin showing particularly high rates of MMCT lending at 45.6%. This reflects the region’s diverse population and its prevalence of all buyers seeking homes across different neighborhood types in this competitive market. Other major Southern cities like Jackson and Birmingham showed more modest MMCT lending despite large minority populations, suggesting continued residential segregation patterns.
Western Region
Western metros reveal the most extreme neighborhood shifts. The region only averages a 16.9% LMI borrowing rate but has a 20.7% LMICT lending rate, indicating widespread purchasing by higher-income buyers in traditionally working-class areas. This pattern appears across diverse Western metros from Portland, Oregon to Phoenix, suggesting a regional phenomenon rather than these being isolated cases.
Western metros also show the highest MMCT lending rates at 37.8%, reflecting both genuine diversity trends in the region and the census reclassification of many neighborhoods. New Mexico provides some extreme examples, including Las Cruces (91.9%) and Albuquerque (75.8%), where majority-Latino populations make MMCTs the norm rather than the exception. California metros like Los Angeles (65.3%) and San Francisco (64.5%) show how expensive markets push all buyers into diverse neighborhoods, accelerating demographic change.
The Transformation's Meaning
These patterns reveal how rising housing costs reshape American communities. In expensive markets, the traditional correlation between neighborhood income levels and resident incomes breaks down. In working-class neighborhoods, middle- and upper-income buyers are being increasingly priced out of wealthier areas, while actual working-class families can find few housing options anywhere.
The surge in MMCT lending partly reflects America’s growing diversity, but also shows how all buyers now compete for homes in previously overlooked neighborhoods. Whether this represents positive integration patterns or problematic displacement trends depends on the local context and whether long-term residents can remain in rapidly changing neighborhoods.
The New Great Migration: Black Home Purchase Lending
Black borrowers received just 8.4% of home purchase loans nationally in 2024, well below their population share. However, regional patterns reveal a story of renewed opportunity following recent demographic shifts. The data reflects a phenomenon researchers call reverse Great Migration, where Black families increasingly move from Northern and Midwestern cities to Southern metros seeking better economic opportunities and more affordable homeownership.
Southern Metros Lead the Way
The South dominates when it comes to Black home lending, with metros like Jackson, Birmingham and Baltimore achieving the strongest representation nationwide. These markets benefit from continued Black migration southward, reversing the 20th century’s Great Migration population shifts. Atlanta, Houston and Dallas have become top destinations, creating robust mortgage demand in these growing markets.
Coastal Exclusion
Western metros present troubling patterns, with major markets like Los Angeles and San Francisco showing extremely low Black lending rates despite having significant Black populations. These expensive coastal markets have effectively priced out most Black families by way of barriers that extend far beyond individual circumstances towards structural affordability problems.
While Southern metros work toward demographic parity in lending, expensive Western markets fall far short of serving their Black populations proportionally.
Rust Belt Challenges
Midwestern metros show the impact of these ongoing reverse migration patterns. Cities like Detroit and Cleveland, once major destinations during the original Great Migration, have now seen Black lending rates falling well below their overall population shares. This reflects broader regional challenges as Black families continue migrating to Southern opportunities, reducing the homebuyer pool in previously economically robust Midwestern communities.
The Northeast shows similar patterns, with expensive metros like New York City struggling while more affordable areas like Philadelphia maintain stronger mortgage lending rates for Black borrowers. These regional differences highlight how housing costs directly impact Black families’ ability to achieve homeownership.
Expanding Beyond Traditional Strongholds: Hispanic Home Purchase Lending
Hispanic lending patterns reflect the continued geographic expansion of Latino populations across the country. While traditional Southwest strongholds maintain dominance in lending rates, the most dramatic growth is occurring in unexpected places as Latino families spread into new regions seeking economic opportunity and affordable housing.
Southwest Region in the Lead
Southwest metros continue leading nationwide when it comes to Hispanic lending, with places like Las Cruces, Albuquerque and Phoenix showing exceptional representation in lending rates. These markets benefit from established Latino communities, cultural familiarity and housing costs that remain accessible to working families even as prices rise.
Phoenix shows strong growth. Latino families are leaving expensive California markets for affordable homeownership in Arizona’s expanding economy. Tucson and other mid-sized Southwest metros maintained high Hispanic lending rates. This happened despite rising costs.
California's Affordability Squeeze
California metros show mixed results despite having large Latino populations. While Los Angeles maintains a substantial Hispanic lending rate, it falls short given the metro’s large Latino population share. This suggests that even established communities face affordability barriers in the state’s expensive housing market.
Sacramento performs better than coastal California metros, reflecting how inland areas offer more realistic homeownership opportunities for Hispanic families priced out of the Bay Area and Los Angeles.
Southern Growth Story
The most exciting developments came from Southern metros experiencing rapid Latino population growth. Cities like Tampa and Austin show exceptional Hispanic lending rates that exceed their overall Latino population shares, indicating strong economic integration and homeownership access in these growing markets.
These Southern growth markets offer an appealing combination for Latino families: job opportunities, housing costs below traditional destinations and expanding Latino business communities that support homeownership access. The pattern suggests continued geographic diversification as Latino families find opportunities beyond traditional settlement areas.
From Gateway Cities to Tech Hubs: Asian Home Purchase Lending
Asian borrowers represent the highest lending share relative to their population share nationwide, reflecting both high homeownership rates and concentrated settlement patterns. Asian families are experiencing an interesting population shift from traditional East Coast gateway cities to West Coast tech centers, with opportunities emerging in these unexpected markets.
Technology Drives Population Concentration
West Coast metros dominate the region when it comes to Asian lending, with the San Francisco Bay area and Seattle metro area taking the lead. These technology hubs attract highly educated Asian immigrants and Asian American professionals, creating exceptional mortgage demand despite extreme housing costs. This racial/ethnic concentration reflects both historic settlement patterns and current economic opportunities in innovation industries.
Sacramento benefits from the Bay Area’s population spillover as Asian families seek more affordable alternatives while remaining connected to California’s tech economy. This pattern shows how high-earning Asian families navigate expensive markets by accepting longer commutes in exchange for affordable homeownership opportunities.
Traditional Gateways Evolve
East Coast metros like New York maintained strong Asian lending rates due to decades of established communities. Traditional gateway cities continue to attract new Asian immigrants while serving established Asian American families seeking homeownership in familiar cultural environments.
The persistence of these patterns shows how community networks and cultural connections influence where many Asian families choose to buy homes, even when other markets might offer better affordability.
Emerging Opportunities
Several metros exceeded their Asian population representation, suggesting strong homeownership rates and economic mobility. Austin’s growing tech sector attracts large numbers of Asian professionals, while affordable Sunbelt markets like Phoenix draw in Asian families from expensive coastal areas.
Midwestern metros often show strong local performance despite smaller Asian populations. These markets offer homeownership accessibility that expensive coastal areas cannot match, creating opportunities for Asian families seeking an affordable entryway into homeownership.
This geographic expansion reflects broader demographic changes as Asian American communities grow beyond traditional coastal concentrations and create new lending opportunities in previously low-representation areas.
Policy Recommendations
Address Geographic Disparities Through Targeted Interventions
The dramatic regional variations in lending access require place-based solutions that recognize how local market conditions shape homeownership opportunities:
- Scaled Regional Assistance: Design down payment and closing cost assistance programs with grant amounts that reflect local market realities. For example, relatively larger down payment assistance programs would be helpful in expensive Western metros where costs create insurmountable barriers, while more moderate support programs could be appropriate in growing Southern markets experiencing rapid price increases.
- Migration-Informed Programming: Develop homebuyer education and counseling programs that acknowledge demographic migration patterns, such as supporting Black families moving South for economic opportunities and Hispanic families expanding into new regions.
- Market-Specific Standards: Establish lending performance benchmarks based on local demographics and affordability rather than uniform national targets that ignore regional market differences.
Expand Accountability Beyond Traditional Banks
Current regulatory frameworks miss the institutions that now dominate community lending, as detailed in previous parts of this research series. The place-based policies described above would be more effective if supported with the following fixes to federal banking regulation:
- Comprehensive CRA Coverage: Extend Community Reinvestment Act (CRA) requirements to large mortgage companies that provide significant loan volumes in underserved communities but face no federal community lending obligations.
- Enhanced Transparency: Require metro-level reporting of lending patterns by demographic group, allowing communities to track how well local lenders serve different populations.
- Performance-Based Oversight: Hold all major lenders accountable for serving the communities where they do business, irregardless of institution lending type.
Resources
For the complete series, including videos, interactive visualizations and localized market analysis, visit our 2025 Mortgage Market series homepage. NCRC members can request customized community data requests as well. Those interested in membership benefits should contact Ralph Cyrus (Membership Engagement Specialist) at rcyrus@ncrc.org.
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