Home Lending in Hamilton County Neighborhoods
This report focuses on Hamilton County, Ohio, home to the city of Cincinnati. It takes a broad look at application and origination activity during the past 27 years (1990 through 2016) and then focuses on trends during the 13-year period from 2004 through 2016. Using figures, tables, and maps, we analyze mortgage lending during the 13-year period from both the neighborhood and individual borrower perspectives, with a particular focus on highlighting the differences observed in the pre- and post-Great Recession periods.
- Prior to the Great Recession, application rates for home mortgages were much higher in Hamilton County’s low- and moderate-income (LMI) neighborhoods than in its non-LMI neighborhoods. Consistent with national trends, application rates fell sharply in the lower-income areas as the Great Recession took hold, falling below the rates in the non-LMI neighborhoods, a reversal of the prerecession trend.
- From 2004 to 2010, the year immediately following the Great Recession, application rates fell by 67 percent in Hamilton County’s low-income neighborhoods and by 61 percent in its moderate-income neighborhoods. Nationally, application rates fell more sharply, declining 77 percent in low-income neighborhoods and 73 percent in moderate-income neighborhoods during this same period. Application rates in Hamilton County’s LMI neighborhoods increased in both 2012 and 2013, but the rates remain considerably lower than the prerecession rates.
- During the 13-year period from 2004 through 2016, origination rates reached their highest point in 2015 in all but the low-income neighborhoods of Hamilton County, where origination rates reached their peak in 2016. Origination rates reached their low point for all neighborhood types in 2007 during the height of the Great Recession.
- Since the Great Recession, homeowners living in high-income neighborhoods have been most able to take advantage of low interest rates to refinance their homes. In 2011, 57 percent of all refinance originations in Hamilton County occurred in high-income neighborhoods; by 2013, the share fell to 47 percent, but that is still higher than the prerecession average of 30 percent.
- In every year examined, white LMI borrowers are proportionally more likely to get a home purchase loan than black LMI borrowers. In 2005, there were 70 home purchase loans by white LMI borrowers for every 1,000 white LMI households, compared to just 32 home purchase loans by black LMI borrowers for every 1,000 black LMI households. While the rates declined for both races from 2005 to 2010, the declines were significantly higher for black LMI borrowers than for white LMI borrowers: 60 percent compared to 42 percent, respectively.
The views expressed in this report are those of the author(s) and are not necessarily those of the Federal Reserve Bank of Cleveland or the Board of Governors of the Federal Reserve System.