Mortgage Market Geography: Should We Use MSAs, CBSAs, Metro Divisions, or Something Else Entirely?

Posted By Laird Nossuli on Nov 01, 2023
Mortgage market Geography CBSA, MSA, MD

Believe it or not, we get this question ALL OF THE TIME from lenders confused by the various data collection levels available and how much detail they need. 

The short answer is that the granularity of data you should look at depends on your business needs. Are you measuring loan officer production countywide? Forecasting census tract-level opportunity? Looking at potential market share across the state or country?

Each business query requires a specific level of granularity and intelligent tools to manipulate that data into actionable intelligence. 

Some Mortgage Market Geography Basics

iEmergent uses census tract data as a baseline because it is the smallest area of geographic data available for HMDA loan-level reporting. Census tracts roll up into larger geographic areas that, in turn, are combined into even larger ones. 

The following are the most common geographic boundaries (smallest to largest) that are often used by lenders:

  • Property level shows individual properties, streets and neighborhoods.
  • Census tracts are small, relatively permanent statistical subdivisions of a county updated by local participants prior to each decennial census as part of the Census Bureau’s Participant Statistical Areas Program. Populations range from 1,200 to 8,000.
  • County, State or U.S. contains data only within those boundaries.
  • Micropolitan statistical areas have at least one urban cluster of at least 10,000 but less than 50,000, plus adjacent territory with a high degree of social and economic integration with the core as measured by commuting ties.
  • Metropolitan statistical areas (MSAs) have at least one urbanized area with a population of 50,000 or more, plus adjacent territory with a high degree of social and economic integration with the core as measured by commuting ties.
  • Core based statistical areas (CBSAs) is a collective term used for Metropolitan and Micropolitan Statistical Areas.
  • Metropolitan division (MD) is a county or counties within a large MSA. An MD will have an employment center or centers, plus adjacent counties associated with the main/secondary county or counties through commuting ties and a population of at least 2.5 million.
  • Combined statistical areas (CSAs) consist of two or more adjacent CBSAs with significant employment and commuting ties. 

Some examples for the geographies that we use the most: Census tracts roll up into counties which roll up into states. Counties also roll up into MSAs, when possible, which can be included in CBSAs. 

If you really want to nerd out on how these geographical areas are combined, check out this presentation from the U.S. Census Bureau.

Clear as Mud?

Those definitions may be confusing, so here’s an example:

In this video, we use Mortgage MarketSmart to look at the Washington-Arlington-Alexandria, DC-VA-MD-WV CBSA. First, we see the CBSA boundaries. Then, we look at the counties within the CBSA. Then we drill down further to the census tracts inside Washington, DC. Then, finally, we see all of the census tract boundaries in the CBSA. 

That’s a look at how the Washington, DC, area looks at various levels of detail. 

These designations matter when it comes to making smart decisions at the neighborhood level and up to the regional level. That’s why Mortgage MarketSmart, our market intelligence and visualization tool, combines iEmergent’s robust forecasts, external data sources, dynamic maps, and simple tools to help lenders focus on just a few neighborhoods or look at the whole U.S., depending on your business needs.

See the variety of datasets available in Mortgage MarketSmart.

The iEmergent Approach to Mortgage Market Geography

With all these geographic options, how do we code them in Mortgage MarketSmart? First and foremost, we build our forecasts from the census tract up, and we also use census tracts for current and historical data. Learn more about our mortgage forecasting methodology

Census tracts roll up into counties, so we can provide county-level data by combining data for the tracts in each county. We take the same approach for MSAs and CBSAs—generate those numbers from the census tract data within them.


We covered the basics of these geographical areas above, but let’s look at how we use them in Mortgage MarketSmart and why we take this approach. 

We’re often asked, “How do you determine what MSAs to use?”

This question comes up because of the difference between MSAs and metro divisions. In Mortgage MarketSmart, we use core-based statistical areas (CBSAs) so both micro and metropolitan areas are included. We label these as MSAs in Mortgage MarketSmart for terminology consistency and because fewer people are familiar with the term CBSA.

Custom Markets in Mortgage MarketSmart

Before we get to answering the question posed in the title, keep this in mind: Just because a geographical area isn’t pre-set in Mortgage MarketSmart doesn’t mean you’re out of luck. The beauty of the platform is that there’s the ability to create custom markets that encompass only the geography you care about. For example, if you only want to see data for six of the 18 counties in the D.C. MSA, you can do that.

DC Custom Mortgage Market

Once you build a market, you can use it anywhere in the Mortgage MarketSmart platform. 

Let’s Make This Real

Let’s look at a real (but anonymous) example. Let’s say a bank wanted to look at loan officer or branch performance in relation to Community Reinvestment Act (CRA) requirements across the Chicago MSA (which spans 14 counties across northeast Illinois, northwest Indiana, and southeast Wisconsin). This Metropolitan Area can also be divided into 4 Metro Divisions: Chicago-Naperville-Arlington Heights; Elgin, IL; Gary, IN; and Lake-Kenosha Counties, WI.

Here’s an interesting hint to know what level you are looking at: Metro Divisions have 5-digit codes and always end in a 4. MSAs also have a 5-digit code, but always end in a 0.

Until CRA Modernization takes effect, CRA requirements are based on a bank’s specific “Assessment Areas” (yes another geographic term), which include only the counties where they have brick-and-mortar branches. Since the bank in our Chicago example doesn’t have branch coverage in every county, their true assessment area would be only those where they do. The lender could easily create a custom market to include the most relevant counties and better analyze CRA performance. 

Here’s how the loan spread looks with the whole MSA included:

Chicago MSA - All counties

If we wanted to look at just loans in counties where there are branches, we can create a custom market and look at forecast data, loans, and CRA performance for just that geography:
Chicago MSA - Custom Market

What Are You Looking For?

Lenders have endless amounts of data available to them: MLS listings, demographics, the NMLS database, HMDA data, and so much more. With a platform like Mortgage MarketSmart you can view this data, alongside our proprietary forecasts, for predefined geographic areas. Or you can create your own geographic markets and pull in information that fits your purpose — and matches the level of granularity you need. 

Here’s why. The more macro you are, the less specific you can be. 

If you’re a big lender looking at the whole U.S. market, you’ll want to start by looking for macro changes by metro area. Then, where there’s a lot of activity or no activity, zoom into a CBSA or MSA to look at the data. This magnification can help you pinpoint where you’re doing business and where you’re not on a very detailed level so you can focus resources more effectively and measure change over time.

The Bottom Line on Mortgage Market Geography

When you’re looking at data and analytics platforms, it’s important to be able to move fluidly between geographically diverse data sets and overlay types, and even be able to create your own custom market based on where you’re doing business or where you’d like to be doing business.

Mortgage MarketSmart integrates the most useful data for lenders to give you the tools to use that data to grow your business, including:

  • Census tract-level mortgage opportunity forecasts
  • Real-time real estate agent and listing intelligence
  • Loan officer production data
  • Market share information
  • Community centers of influence, such as places of worship, schools, and libraries
  • Historical lending data

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We’d welcome the opportunity to show you the power of Mortgage MarketSmart using your own production data in our use cases. 
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