MBA Chart of the Week: 2016 Share of Mortgages with Balances >$500k by State
Source: Mortgage Bankers Association analysis of 2016 HMDA data
Seven percent of first-lien home purchase mortgage balances originated in the U.S. in 2016 exceeded $500,000, according to an MBA analysis of Home Mortgage Disclosure Act data.
By dollar volume, these large loans represent 22 percent of home purchase originations. This figure, $500,000, is the proposed maximum balance on which mortgage interest would be deductible in the proposed Tax Cuts and Jobs Act released Nov. 2 by House Republicans. The Act seeks to overhaul the U.S. individual income and corporate tax code.
States with the largest share are high-costs areas, such as the District of Columbia and Hawaii, where more than 40 percent of home purchase loans originated last year exceeded $500,000, followed by California at 27 percent and New York and Massachusetts at 16 percent. Many of the nation’s high priced homes are clustered in a few coastal states; however, such that the majority of states had less than the national average 7 percent share of purchase mortgage balances exceeding the proposed threshold.
Results are based on a set of exclusions that MBA imposes on the HMDA data, resulting in retail/broker first lien-only originations for home purchase of 1-4 unit homes, including manufactured homes. Additional HMDA analysis can be found at https://www.mba.org/news-research-and-resources/research-and-economics/single-family-research/mba-residential-origination-databook-and-reports.
(Michael Fratantoni is chief economist and senior vice president of research and economics with the Mortgage Bankers Association. He can be reached at mfratantoni@mba.org. Lynn Fisher is vice president of research and economics with MBA; she can be reached at lfisher@mba.org. Joel Kan is associate vice president of economic forecasting with MBA; he can be reached at jkan@mba.org. Brennan Zubrick is senior financial reporting and data management analyst with MBA; he can be reached at bzubrick@mba.org.)
