Insights
Market reports, forecast data, industry insights, and more from iEmergent.
Since the mortgage industry will be convening in Philadelphia for the Mortgage Bankers Association (MBA) Annual Meeting and Expo, we’re profiling the City of Brotherly Love for our October market forecast and analysis.
Home to world-class museums, a thriving arts scene, and the eponymous Philly cheesesteak, Philadelphia is known for its historic significance, sports enthusiasm, and diverse demographics. After cracking open our Mortgage MarketSmart mortgage market intelligence and forecasting platform, we’ve found that the mortgage market is as unique as the culture eclectic in the beloved city of Gritty.
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To understand the future of any mortgage market, iEmergent has developed mortgage opportunity forecast reports, which are five-year projections of purchase loan activity by census tract (CT). These forecasts are exceedingly predictive of future market conditions and outperform forward-looking analytics accuracy standards.
Looking at the mortgage opportunity forecast for Philadelphia shows that 60,899 purchase mortgage loans worth a collective $21.04 billion will be originated next year. The average loan size will be $345,439.
If you have read our blogs before, you likely know that each mortgage market is unique and that no mortgage market is homogeneous. The census tract-level 2024 forecast data for Philadelphia shows how this applies to both demographics and home loan opportunities. By looking at neighborhood-level data, such as the visualization below, lenders can pinpoint opportunities in the neighborhoods they serve.
Our Mortgage Velocity Index (MVI) shows that mortgage market opportunity in Philadelphia will grow over the five-year period starting in 2024. An MVI of 1 means market growth is on pace with the national rate. Philadelphia has an MVI of .47, which means that it is growing, but at a slower rate than the U.S. overall.
For comparison, here is how Philadelphia lines up with other major markets in the United States:
Market-level data is much more valuable than national data, which is hard (if not impossible) to use to make decisions. Mortgage MarketSmart enables lenders to gain an unprecedented understanding of the communities they serve by breaking markets down by borrower segment, loan type, and so much more. Let’s take a look.
One way we can segment data in a market is by borrower type. In this case, we’ve looked at borrower race to see 2024 mortgage demand for Asian, Black and Hispanic borrowers.
Visualizing forecast data allows us to see that projected demand from both Asian and Hispanic borrowers is largely dispersed throughout Philadelphia, though it is concentrated in select CTs.
The map for Black borrower opportunity looks a bit different. Loans to Black borrowers are clustered in a few areas and especially concentrated in the southwestern corner of the market. Most of the opportunity, in fact, is outside Philadelphia proper and in suburbs like Middletown and Elkton.
2024 Purchase Dollars - Black Borrowers
The overall trend in Philadelphia is that mortgage loans to Asian and Black borrowers are forecasted to increase in 2024 and 2025, whereas loans to Hispanic borrowers are projected to stay relatively flat.
Data about diverse lending opportunity can be used in many ways, including to inform Community Reinvestment Act (CRA) initiatives, build a Special Purpose Credit Programs (SPCP), to recruit the right MLOs, and much more.
In addition to viewing data by borrower race, we can look at opportunity by borrower income level—low, moderate, middle, and upper. The CRA groups low- and moderate-income (LMI) borrowers into a single segment. iEmergent is able to to help lenders reach these borrowers and achieve CRA compliance goals by identifying forecasted LMI borrower market activity down to the neighborhood level.
Compared to the other markets we’ve reported on (e.g., Atlanta and Los Angeles), Philadelphia has a much higher percentage of LMI borrowers. The same is true when we compare Philadelphia to cities of a similar size like Houston, Phoenix, and San Diego. Whereas other markets have loans to LMI borrowers in the single or low double digits, Philly has more than one-third of loans to LMI borrowers!
These LMI borrowers are buying fairly evenly across the city, in both qualified LMI census tracts as well as census tracts that are not considered LMI:
Equipped with this information, lenders in Philadelphia can help increase homeownership for all by building relationships with LMI homebuyers and offering down payment assistance (DPA) and other lending programs that support their financial needs.
Since 2010, iEmergent’s forecast has outperformed most predictive analytics from other industries, maintaining an accuracy rate of over 90%, and is backed by a money-back accuracy guarantee*. You can read more about the forecast here.
Imagine having this data (and more!) for your markets. What kind of strategies could you plan? How would your 2024 look different?
Forward-looking data—combined with historic, current data, and innovating analysis tools—set lenders apart. If you want to grow in 2024 (or hit your 2023 goals in the last quarter), let’s talk. Schedule a Demo
All maps and data in this email are from iEmergent’s proprietary forecasts and Mortgage MarketSmart’s suite of market intelligence tools.
Generally accepted minimum accuracy standards for predictive analytics: 70%.