Insights
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While many cities across the U.S. continue to expand, Baltimore finds itself in a unique position. Ranked among the Top 15 Shrinking U.S. Cities in 2024, the city has lost thousands of residents over recent years, with many pointing to high taxes, low services, and high crime rates as the primary drivers of this trend. But what does a declining population mean for the mortgage market? And how can lenders adjust their strategies to continue growing in a market facing demographic challenges?
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The Baltimore-Columbia-Towson, MD, Core-Based Statistical Area (CBSA) encompasses six counties and the city of Baltimore, making it the 22nd largest U.S. metro area by population.
Despite its size and diversity, Baltimore’s mortgage market is projected to grow slower than the national average. According to iEmergent’s Mortgage Velocity Index (MVI), Baltimore’s growth rate is 0.98—slightly below the U.S. market’s overall pace. From 2023 to 2026, the total dollar value of purchase originations in the market is forecast to increase by $458 million (4.3%), yet actual loan units are expected to decline from 29,000 loans in 2023 to 26,800 in 2026. This suggests that while home prices will increase, the number of borrowers in the market will decrease.
In 2025, we project over 26,500 purchase loan originations, totaling approximately $10.9 billion in purchase loan volume, with an average loan size of $409,000:
Mapping our 2025 forecast at the census tract level reveals concentrated areas of mortgage opportunity, with bright red and orange highlighting key growth zones along a central corridor running north-south through the CBSA.
By County By Census Tract
Baltimore’s mortgage market is projected to grow at a pace slightly below the national average. This indicates that while Baltimore is not in decline, its lending activity is not keeping pace with the broader mortgage market.
Looking at other major cities, Atlanta is experiencing even stronger growth. New York City is expanding faster than the national average but still trails Washington, D.C., while Los Angeles is growing slower.
The increase in purchase dollar originations is driven by rising home prices and larger loan amounts rather than a higher number of transactions. Capturing business will require targeted strategies focused on key borrower segments for lenders.
Mortgage opportunities exist even in a declining population. The key is identifying the right borrower segments and geographies.
1. Addressing the Homeownership Gap The homeownership gap in Baltimore is one of the widest in the country:
For Black households, the gap is 20 percentage points below the overall market rate and 31 points behind the Non-Hispanic White rate. Additionally, loans to Black borrowers remain concentrated in a few neighborhoods, limiting lending expansion.
What Lenders Can Do:
2. Increasing LMI Outreach Low-to-moderate-income (LMI) lending remains critical in Baltimore as home prices rise and affordability declines. The market is expected to see steady loan activity in LMI census tracts. However, the number of LMI purchase loans will decrease slightly due to higher home prices limiting borrower accessibility.
How Lenders Can Respond:
3. Refinancing on the Rise Like the rest of the U.S., Baltimore is expected to experience a surge in refinance activity, with refi originations nearly tripling from 2023 to 2026 as interest rates decline. Minority borrowers are projected to represent about one-fourth of these refinance loans.
Lender Opportunities:
While Baltimore’s shrinking population presents challenges, it doesn’t have to mean declining loan volume. Using data strategically, lenders can uncover hidden opportunities and better serve underserved borrower segments.
Baltimore’s housing market may not be growing rapidly, but lenders can still expand their business by focusing on diverse lending strategies, supporting LMI borrowers, and leveraging refinancing opportunities. With the correct data and targeted outreach, lenders can drive meaningful growth while closing long-standing homeownership gaps.
All maps and data in this blog are from iEmergent’s proprietary forecasts and Mortgage MarketSmart’s suite of market intelligence tools.
Generally accepted minimum accuracy standards for predictive analytics: 70%.