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Community Development Reports

Home Lending in Franklin County Neighborhoods

This report focuses on Franklin County, home to the city of Columbus, Ohio, and takes a broad look at application and origination activity during the past 27 years (1990 to 2016), and then delves into trends during the 13-year period from 2004 to 2016. Using maps and a series of figures and tables, we tell the story of mortgage lending during these periods from both the neighborhood and borrower perspectives.

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.

Key Findings

  • Loan application and origination activity peaked in 2003 but plummeted as the Great Recession set in. By 2008, application and origination activity dropped by 67 percent (nearly 76,000) and 72 percent (more than 58,000), respectively.
  • Prior to 2008, loan application rates were highest in low- and moderate-income (LMI) neighborhoods, but after that year, the order flipped. Middle- and high-income neighborhoods saw more erratic changes primarily driven by refinance activity, while application rates in LMI neighborhoods remained depressed, with a slight uptick until 2013.
  • Origination rates across all neighborhood income groups jumped an average 11 percentage points in 2009 and since then have seen further increases notwithstanding a decline in 2011. From 2014 to 2016, that increase ranged from 6 percentage points in low-income neighborhoods to 2 percentage points in high-income neighborhoods.
  • Homeowners living in high-income neighborhoods were increasingly able to take advantage of lower interest rates, and the share of refinance loans in high-income neighborhoods increased 34 percentage points from 2005 to 2011. In 2016, the share remained at 53 percent.
  • The rate of home purchase loans per 1,000 households declined for all race and income groups following the Great Recession (2005 versus 2010), but for black borrowers, the decline was steeper.
  • Looking at the purchasing differences by race in another way, we find that while black people accounted for 23 percent of Franklin County’s population in 2016, they accounted for only 11 percent of the home purchases. Conversely, white people accounted for 69 percent of the county’s population but 89 percent of all home purchases.
Suggested Citation

Klesta, Matt. 2018. “Home Lending in Franklin County Neighborhoods.” Federal Reserve Bank of Cleveland, Community Development Reports.