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St. Louis, home to one of a dozen regional Federal Reserve banks, is one of the most affordable markets in the country when comparing average home prices to median income. It also has a decent chunk of vacant inventory.
But this major city in Missouri is also one of the country’s most divided, its landscape shaped by a history of segregation ordinances, racially restrictive covenants, and redlining. Nowhere is this more visible than along the “Delmar Divide.” The two sections of St. Louis—north of the Delmar Divide and south of it—are like two separate markets. Home values, household incomes, minority population, and low- to moderate-income (LMI) population are drastically different, with the majority-Black north St. Louis having lower home values, lower household incomes, and higher Black and LMI populations. The Economic Innovation Group provides a line-by-line comparison.
So where do mortgage lending opportunities lie in St. Louis? And how can lenders in this historically divided market use data to help close the large homeownership gap between Black and white households? Read on to find out.
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The U.S. mortgage market has 393 metropolitan statistical areas (MSAs) and more than 84,000 census tracts. Because each is unique, we forecast mortgage opportunities at the census tract level—this way, lenders can use local data to make localized decisions. Since 2010, iEmergent’s forecast has outperformed most models designed to predict U.S. mortgage originations, maintaining an accuracy rate of more than 90%.
The St. Louis, MO-IL, MSA is a major metro area in the Midwest that straddles the Missouri and Illinois state lines where the Missouri and Mississippi rivers meet.
With a population of 2.8 million people across 1.15 million households, the overall homeownership rate is 69.8%. The minority population is around 30% of the total population, with Black people making up the majority of this segment.
In St. Louis, our 2025 projections show 54,095 combined purchase and refinance loans, amounting to $14.2 billion in total volume with an average loan size of $262,584.
By visualizing our forecast data for 2025 purchase and refinance loans in the St. Louis market by census tract, you can see that fewer loans are forecast to be originated in the northern half of St. Louis and more generally, in the urban core.
While big national lenders took the top spots for 2024 loan dollars, local lenders held their own in the top 10. USA Mortgage (DAS Acquisition Company), Stifel Bank and Trust, and Flat Branch Mortgage are just a few of the Missouri-based lenders on the list.
From 2023 to 2026, total dollar volume for purchase and refinance originations in St. Louis is forecast to grow $5.8 billion, a 55.7% increase. The increase can be attributed to higher home prices—and therefore higher loan amounts—as well as a 40% increase in loan units, many of which are forecast to be refinance loans.
This growth, however, is forecast to slow. From 2025 to 2030, the St. Louis market is expected to grow more slowly than the U.S. as a whole.
iEmergent’s Mortgage Velocity Index (MVI) compares a market’s rate of growth in loans over the next five years to the growth rate of the overall U.S. market. An MVI of 1 means a market is growing on pace with national market growth, and St. Louis has a 0.88 MVI. That means St. Louis is growing slower than our nation as a whole and about half as fast as markets like Washington, D.C.
Because market growth is expected to slow in St. Louis, lenders must find areas of opportunity to drive business.
St. Louis isn’t known for being the most diverse market, but with 29.7% of its population being minorities, this segment is far from negligible. (Note: The minority population percentage is much higher—more than 40%—within the St. Louis city limits, but for this analysis, we’re considering the entire MSA.)
The homeownership gap remains wide in St. Louis, with the non-Hispanic white homeownership rate more than 36 percentage points higher than that of Black households.
Non-Hispanic white households make up 74.7% of households in the St. Louis market but accounted for 84.4% of loans in 2024. And while the penetration rate for Asian, Black, and Hispanic borrowers has improved in the last few years, it still lags behind population percentages by double digits.
While the Black population is the most significant minority segment in the St. Louis market, Black households are not spread out evenly. Most are concentrated in north St. Louis, with a distinct cut-off at the Delmar Divide, visualized below:
In the St. Louis MSA, 32.5% of census tracts are LMI tracts, higher than the national average of 28.8%.
Lending to LMI borrowers accounts for about 22% of loan dollars and 35% of loan count in the market. These loans to LMI borrowers are spread throughout the market, many of them outside of the LMI census tracts concentrated in North St. Louis:
The potential to serve LMI borrowers in this market is promising based on a number of factors. Zillow research found that St. Louis is one of only 11 markets in the U.S. where the median income is enough to afford the typical mortgage payment. At the same time, there are 25,000 vacant or abandoned properties in the city of St. Louis. Not all of these are move-in ready; still, they represent a potential source of inventory at a time when many cities are short on housing.
In a market with relatively affordable home prices and a lot of vacant properties, lenders have the opportunity to design products and programs that help LMI households become homeowners.
St. Louis is a market with a long history of segregation where different areas of the market have very different homeownership experiences.
But there’s work being done by lenders and community organizations, and the market—with vacant inventory and affordable home prices—has the potential to see equitable lending gaps closed more quickly than in others.
Finding LMI and diverse borrowers who are homeownership ready and don’t even know it yet is the key to success in a market like this.
iEmergent’s data and tools help lenders in markets like St. Louis:
Forward-looking data—combined with historic, current data, and innovating analysis tools—sets lenders apart. If you want to grow, connect with iEmergent today.