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CoreLogic Econ


The Size of the Mortgage Market in 2015

Sam Khater    |    Mortgage Performance

Three weeks before the Federal Financial Institutions Examination Council (FFIEC) released the 2014 Home Mortgage Disclosure Act (HMDA) data, CoreLogic estimated what the “headline” numbers would be. The actual HMDA numbers came out on September 22. So, how did we do in our September 2 estimate?

First, a little background: HMDA gets its data from data submissions of more than 7,100 lenders that account for approximately 95 percent of all U.S. originations. The total number of records in this year’s database approached 12 million. The submissions are due March 1 for volumes through the previous December 31 and it typically takes the FFIEC another nine months to compile and analyze the data and release the report.

Until the report is released, residential first lien mortgage origination volume is based on estimates from industry sources, like the Mortgage Bankers Association, Fannie Mae and Freddie Mac. But the score isn’t official until the HMDA report comes out. CoreLogic mined public record deed information back to 2006 to come up with a “proxy” for what the HMDA report will eventually show and historically our estimates have been very close.

That was the case again this year. We estimated that the dollar volume of originations in 2014 would be at least $1.28 trillion and possibly as high as $1.36 trillion. The figure HMDA delivered was $1.24 trillion. Our estimates showed a 27 percent drop in mortgage volume for 2014; HMDA’s showed a 30 percent decline.

According to our analysis, the decrease in dollar volume mortgage originations in 2014 was primarily due to a 47 percent year-over-year decline in refinances. The actual decline, according to HMDA, was 53 percent. HMDA estimated refinance originations at $491 billion (down from $1.1 trillion in 2013). Our estimate was $592 billion—a difference of 20 percent. The drop in refinance volume was partially offset by an increase in the number and size of purchase mortgages.

We estimated that the number of purchase money originations increased by five percent and the dollar volume increased by seven percent in 2014. This brought our estimate of purchase volume up to $697 billion. HMDA’s was $744 billion—a difference of six percent.

The 2015 HMDA data will be released in September 2016, but the advantage of the public record data is we can already preview what next year’s HMDA data will show for 2015, especially for the important purchase market. For the first half of 2015, CoreLogic estimates purchase originations to reach $378 billion, up 17 percent from $324 billion in 2014, and a 12 percent increase for the number of purchase loans. In the near future, we will begin releasing timely mortgage originations estimates to better inform lenders, investors and policymakers about the size and characteristics of the mortgage market on a much more real-time basis.

© 2015 CoreLogic, Inc. All rights reserved.