Insights
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Since the 2025 HMDA data came out, we’ve continued to analyze it for trends and patterns. In part 1 of our analysis, we covered overall trends like originations and applications. Here in part 2, we’re going to look at trends by race and ethnicity.
2025 U.S. Mortgage Originations by Race/Ethnicity
2025 Mortgage Loan Application Patterns By Race/Ethnicity
Going Beyond 2025
Navigation note: Under each subhead, we’ve provided an “in short” summary—a tl;dr (too long; didn’t read), if you will. You can skim these summaries and dig more into the sections you find most interesting.
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In short: Origination penetration rates to diverse borrowers reversed course in 2025 when non-Hispanic white borrowers took a larger share (74.15%) than in 2024 (72.79%).
In 2025, a majority of originations (74.15%) continued to go to non-Hispanic white borrowers.
2025 Loan Count Share By Race/Ethnicity
Loan dollar volume numbers follow a similar pattern, but with Asian borrowers taking four percentage points more due to much larger average loan size (see the next section).
2025 Loan Dollar Share By Race/Ethnicity
These 2025 penetration rates are a step back from the pattern we saw in 2021 through 2024, where minority borrowers were capturing larger shares each year. Loans to diverse borrowers were growing in share, with the non-Hispanic white share decreasing, but that ended in 2025 when that segment’s share of loan count increased from 72.79% in 2024 to 74.15% in 2025.
2021-2025 Loan Count Share By Race
Compare these penetration rates to population percentages. In an all-things-equal world, we’d expect to see origination shares similar to household shares. But, of course, that’s not what we see.
Here are U.S. household percentages by race/ethnicity:
Household race/ethnicity categories don’t exactly align with HMDA’s categories, but we can see that while the non-Hispanic white household share is 64%, these households are getting 74.15% of the loans.
And while Black/AA people make up 12.2% of U.S. households, they get only 7.2% of loans.
In short: Purchase loan sizes increased across all segments from 2021 to 2025, but wide gaps still remain between groups.
Average loan size offers a window into purchasing power, affordability, and access to higher-cost housing markets. Persistent differences in average loan sizes reflect differences in income, wealth, down payment resources, geography, home prices, product mix, and access to credit—all of which shape where households can buy and which barriers need to be overcome to do so.
Across the board, average purchase loan sizes have generally increased since 2021, reflecting the broader increase in home prices and borrowing needs in the purchase market.
2021-2025 Purchase Average Loan Size By Race/Ethnicity
The largest average loan sizes are consistently associated with Asians, reaching about $520K for purchase loans (chart above) and $486k across all loan purposes (chart below) in 2025.
2025 All Purpose Average Loan Size By Race/Ethnicity
The large gap shows that Asian borrowers are buying, refinancing on, and improving more expensive homes than other race/ethnicity groups. On the other end, Black, Native American/Alaskan, and Hispanic borrower segments all average under $300,000 across all loan purposes.
The pattern suggests that while all borrower groups are experiencing higher purchase loan amounts over time, the size of the loan—and by extension, the likely price point of homes being purchased—continues to vary meaningfully by race and ethnicity.
As home prices increase, borrower groups that average lower loan sizes will be priced out of some markets.
In short: Minority borrowers are most visible in the part of the market most tied to future homeownership growth: purchase lending.
The loan purpose mix for minority/BIPOC (Black, Indigenous, and People of Color) borrowers vs. non-Hispanic white borrowers look quite different, with diversions expanding in 2025 compared to previous years.
2025 Minority Loan Count Share By Loan Purpose
Minority/BIPOC borrowers were strongest in the purchase segment (60.76%), with refi, home improvement, and other (home equity/HELOC) loan purpose categories making up the other 39.24%. Contrast this with non-Hispanic white borrowers.
2025 Non-Hispanic White Loan Count Share By Loan Purpose
Non-Hispanic white borrowers had significantly lower purchase share but higher refi, home improvement, and other share compared to minority borrowers.
Lenders should evaluate their product-market fit to make sure all borrower segments have access to loans beyond just those for home purchase.
In short: Government-backed lending remains critical for Black, Hispanic, Native American/Alaskan, and Pacific Islander borrowers, while Asian and Non-Hispanic White borrowers are more heavily concentrated in conforming loans.
Conforming loans continue to make up the largest share of purchase lending for every borrower segment, but the degree of reliance on conforming lending varies significantly.
2025 Purchase Loan Type By Race/Ethnicity
Asian borrowers had the highest conforming share in 2025, at 81% of purchase loans, followed by non-Hispanic white borrowers at 71%.
By contrast, conforming loans account for a much smaller share (47%-57%) of purchase lending for Black Hispanic, Native American/Alaskan, and Pacific Islander borrowers. Government lending products have much higher share in these segments, including FHA and FSA loans as well as VA loans, which are especially important for Native American/Alaskan and Pacific Islander borrowers.
The purchase market is not served through one product channel alone. For many historically underserved borrower groups, FHA and VA lending are essential access points into homeownership as a way to combat differences in down payment resources, credit profiles, income, military eligibility, and affordability constraints.
Turn Insight Into Action Equitable purchase lending strategies need to include strong execution in government products, not just conventional/conforming lending.
In short: IMBs dominated 2025 BIPOC/minority lending volume, with wholesale and digital-scale lenders capturing the largest shares.
When we break down loans by lender type, we see 66.37% of loans to minority borrowers were made by IMBs. Banks (21.28%) and credit unions (12.35%) lag significantly behind in minority market share.
2025 Minority Loan Share By Lender Type
Minority/BIPOC lending nationally is dominated by a relatively small group of high-scale lenders. The top 20 BIPOC/minority lenders originated a substantial share of the 1.7 million loans to BIPOC/minority borrowers in 2025, but the ranking is highly concentrated at the top.
2025 Top 20 BIPOC Lender Rankings
This pattern suggests that BIPOC/minority borrowers are being reached heavily through lenders with broad origination scale, strong purchase-market execution, wholesale/broker channels, builder-affiliated platforms, or digital/direct lending models.
For depositories and community-focused institutions, the chart raises an important strategic question: are they competing effectively in the channels, products, geographies, and borrower segments where diverse mortgage demand is already active?
This is both a competitive warning and an opportunity to learn from the product, channel, and execution models that are reaching diverse borrowers at scale.
In short: The percentage of loan applications to households of color decreased, ending the steady gains seen from 2021-2024. This reversal is possibly a result of increasing issues of affordability.
From 2021-2024, there was a meaningful shift in the racial and ethnic composition of mortgage applications. BIPOC/minority applicants increased their share of total applications each year, moving from one in four applications in 2021 to nearly one in three by 2024. At the same time, the non-Hispanic white application share declined from 75% to 70%, indicating that borrower demand was becoming more diverse even during a period of rising rates, affordability pressure, and lower overall mortgage volume.
2021-2025 Application Penetration Rate By Race/Ethnicity
The 2025 data, however, shows a slight reversal. BIPOC/minority application share declined from 30% in 2024 to 28% in 2025, while the non-Hispanic White share rose from 70% to 72%. This does not erase the broader multi-year trend—BIPOC/minority applicants still represent a larger share of applications than they did in 2021. But it does suggest that access and participation gains are not guaranteed to continue without intentional strategy, especially when housing affordability continues to be a real challenge.
For lenders, the key takeaway is that diverse borrower demand is real, but it may also be more sensitive to market stress. BIPOC and minority borrowers may be more likely to delay, exit, or never take a step on the homebuyer pathway when:
If the lending penetration rate of BIPOC applicants can’t stay on pace with the increase in household formation, we will need to question whether housing and lending institutions are effectively reaching and supporting the fastest-growing segments of future homeownership demand.
Turn Insight Into Action Lenders that want to grow need to continuously evaluate whether their products, outreach, partnerships, and borrower support systems are aligned with where future mortgage demand is coming from...and make changes if they aren’t.
In short: Hispanic and Black applicants continue to drive most BIPOC/minority application penetration, with total BIPOC share remaining above its 2021 level despite a 2025 dip.
The total BIPOC/minority application share rose from 25% in 2021 to 30% in 2024, but dropped back to 28% in 2025. Even with a recent decline, the 2025 share remains higher than the 2021 baseline, showing that the applicant pool is still more diverse than it was at the start of the period.
2021-2025 Minority Application By Race/Ethnicity
Within the BIPOC/minority total, Hispanic applicants represent the largest share, increasing from 10% in 2021 to 12% in 2023 through 2025. Black applicants also increased from 7% in 2021 to 9% in 2025, after peaking at 10% in 2023. Asian applicants were relatively stable, generally ranging from 6% to 7%, while Native American/Alaskan and Pacific Islander applicants represented much smaller shares of overall applications.
The 2025 decline in total BIPOC/minority application penetration appears to reflect flat or slightly downturned growth from several groups rather than a collapse of applications from any one group. Hispanic share held steady at 12%, while Black and Asian shares each dipped slightly below their penetration rates of 2024. Although the pool of households continues to diversify across the United States, participation in the homebuyer market may be flattening or slipping under current affordability and inventory pressures.
Turn Insight Into Action The future growth story is not one-size-fits-all: Hispanic, Black, Asian, Native American/Alaskan, and Pacific Islander applicants contribute differently to total market demand. Lenders need group-specific strategies, local market intelligence, and product support that reflect where diverse demand is growing—and where participation may be at risk of stalling.
In short: BIPOC/minority application share remains strongest in purchase lending, but 2025 showed a pullback for every loan purpose except refinance.
Purchase applications continue to have the highest BIPOC/minority representation, reaching 33% in both 2023 and 2024 before easing to 32% in 2025. This underscores the importance of diverse borrowers to the future purchase market, even as affordability constraints may be limiting continued growth.
Application Rate By Race/Ethnicity and Loan Purpose
Similar to overall applications, BIPOC/minority application share increased across all loan purposes (purchase, refinance, other, and home improvement) from 2021-2024, while the non-Hispanic white share declined.
In 2025, however, the gains slowed. BIPOC/minority share declined in purchase, other, and home improvement applications, while refinance remained flat at 26%. The largest reversals were in home improvement and other-purpose lending, both of which BIPOC/minority share fell from 27% to 25%. That pullback may point to tighter affordability, reduced equity access, weaker borrower confidence, or product/channel differences that affect who remains active in the market.
The 2025 pullback across multiple purpose categories makes it important for lenders to examine not only overall application share, but also whether strategies for each loan purpose are reaching diverse borrowers consistently and equitably.
In short: BIPOC/minority applicants experience higher fallout rates, for any reason, compared to non-Hispanic white applicants.
BIPOC/minority applicants have higher fallout rates than non-Hispanic white applicants for all loan purposes. The disparity is especially visible in home improvement and other lending, where 2025 BIPOC denial rates were 42% and 40%, compared with 26% and 28% for non-Hispanic White applicants.
2025 Application Action By Race/Ethnicity and Loan Purpose
Purchase lending has the strongest overall origination rate for both groups (70% for non-Hispanic white and 64% for BIPOC/minority), but disparities remain. In other words, in 2025:
This fallout gap is driven primarily by the difference in denial rates between the two groups: BIPOC denials were 14%, while non-Hispanic white denials were only 9%.
Refinance outcomes show a similar disparity but slightly different challenge. BIPOC/minority applicants had a lower origination rate (46%) than non-Hispanic white applicants (54%) as well as a higher denial rate (22% BIPOC versus 18% white). However, for refi, withdrawals and incomplete applications also represent a meaningful share of refinance fallout for both groups. This could suggest that pricing, borrower confidence, documentation burden, or changing loan economics—in addition to underwriting outcomes—may be affecting completion.
Turn Insight Into Action For lenders focused on growth and equity, the opportunity is not only generating more applications, but also in identifying where borrowers are being denied, withdrawing, or failing to complete the process. The challenges behind these outcomes can then be addressed through product offerings, application process, pricing, and other barriers.
In short: Fallout remains elevated across all groups, but Black, Native American/Alaskan, and Pacific Islander applicants experience the highest and most persistent fallout rates.
Total application fallout (applications not originated for any reason) increased sharply for most race/ethnicity groups after 2021 and has remained high through 2025.
2021-2025 Application Fallout By Race/Ethnicity
Non-Hispanic white applicants had the lowest overall fallout rate, holding at about 40% from 2023 to 2025, with Asian applicants close behind at 41% in 2025. Hispanic White applicants were higher still, in the mid-40s since 2022.
The highest fallout rates are concentrated among Black/African American, Native American/Alaskan, and Pacific Islander applicants. In 2025, total fallout rates were:
In other words, more than half of applications from these groups did not result in an originated loan.
Denials are the largest component of fallout for every group, but the size of the denial gap is meaningful. In 2025, denial rates were 26% for Black/African American and Pacific Islander applicants and 24% for Native American/Alaskan applicants, compared with 16% for non-Hispanic White and Asian applicants.
Withdrawals are also consistently high across all groups, suggesting that fallout is not only an underwriting issue but also a borrower journey, affordability, and process issue. This tells us that diversity at the application stage is not enough; lenders also need to understand where and why applicants fall out before closing.
Reducing fallout, especially denials and withdrawals among the highest-fallout groups, is both an access-to-credit priority and a growth opportunity.
In short: 2025 fallout gaps were widest in home improvement and other-purpose lending, where denials drive sharply different outcomes by race and ethnicity.
Application fallout varies substantially by both borrower group and loan purpose. Purchase lending has the lowest fallout rates overall, ranging from 30% for non-Hispanic white applicants to 42% for Black/African American applicants (a gap of 12 percentage points).
2025 Fallout Rate By Race/Ethnicity and Loan Purpose
Compared to purchase, refinance fallout overall is higher and more compressed across groups, with persistent disparities. Black/African American applicants have the highest refinance fallout rate at 59%, followed closely by Native American/Alaskan applicants at 58% and Pacific Islander applicants at 56%. Asian (45%) and non-Hispanic white (46%) applicants have the lowest refinance fallout rates. Both denials and withdrawals contribute meaningfully to refinance fallout, which reflects a mix of underwriting, pricing, equity, and borrower-decision dynamics.
The most severe fallout gaps appear in other-purpose and home improvement lending. These categories are especially denial-heavy, which may point to differences in equity, collateral, credit profile, property condition, loan size, or product fit.
Disparities exist in purchase lending fallout, showing that homeownership access is not equal for all borrower groups. There are also disparities in the loan products that help households maintain, improve, or access equity in their homes. For lenders, reducing fallout means looking at the data by loan purpose to identify where denials, withdrawals, and incompletes reflect fixable barriers.
In short: Purchase denials remain driven by DTI, affordability, and credit barriers, with down payment challenges increasing as housing costs continue to rise.
In 2025, across nearly every race/ethnicity segment, debt-to-income (DTI) remained one of the most frequently cited denial reasons, underscoring the challenge of affordability in many markets.
2025 Application Denial Reasons By Race/Ethnicity
Issues with credit continue to be a bigger challenge for Black and Native American/Alaskan applicants, with credit history being a reason given in 40% of all denials to Black applicants (up from 36% in 2021). This suggests that credit challenges are not only about current income and affordability, but also about how past credit experience, thin-file issues, and credit scoring impacts different communities.
As home prices, mortgage rates, insurance costs, and other housing expenses remain elevated, more applicants appear to be limited by the relationship between income, accrued debt, and the cost of purchasing a home.
We see this in down payment related denials on purchase applications, which increased significantly for every segment between 2021 and 2025:
Segment
2021 Down Payment Denials
2025 Down Payment Denials
Black/AA
8%
15%
Hispanic White
14%
Native American/Alaskan
Non-Hispanic White
7%
12%
Growing down payment denials point to widening savings and liquidity challenges in the purchase market, where even borrowers who may have sufficient income to pursue homeownership can be stopped by upfront cash requirements. It also underscores how the housing cost burden on renters continues to be a barrier for making the jump to homeownership.
These denial patterns show that purchase lending barriers are made up of multiple issues—and why singular solutions may fall short. It’s critical to have (and use) programs that provide credit readiness support, down payment assistance, matched savings accounts, lender grants, and education about homeownership, which may help more households move successfully from application to homeownership.
In short: Purchase denial rates are highest in LMI tracts, but the overlapping disparity in denial rates between different racial/ethnic groups within the same income level confirm that denial barriers are greater for households of color.
Across every race/ethnicity group, denial rates for purchase applications are generally highest in low- and moderate-income (LMI) census tracts and lowest in upper-income tracts, reinforcing that neighborhood-level market conditions are strongly connected to mortgage access.
2025 Purchase Denial Rates By Tract Income and Race/Ethnicity
The pattern is especially pronounced for Black, Native American/Alaskan, and Pacific Islander applicants. Black applicants have denial rates near 20% in low-, moderate-, and middle-income tracts, compared with 15% in upper-income tracts.
Asian and non-Hispanic white applicants have lower denial rates overall, and the same tract-income pattern is still visible. For both groups, denial rates are highest in lower-income tracts and decline as tract income level rises. Tract-level context matters across the full market, even when borrower-level denial rates differ by race and ethnicity.
An easily-overlooked fact uncovered in the above chart is that the denial rate for low income non-Hispanic white applicants (12%) is actually lower than the denial rate for upper income Black applicants (15%), which means perhaps race is an even larger determinant in denials than income.
HMDA data is great. As you can see, we love it! Looking at industry trends is helpful (and fun) to see where we’ve headed at a macro level.
But the power of iEmergent’s data and tools comes with drilling down into individual markets and segments—and into each lender’s data, alone and compared to peers—to find actionable data that drives strategy.
If you want access to analyze HMDA data, or to view what’s ahead in individual markets, you can do so in Mortgage MarketSmart. Not a user yet? Schedule a demo now.