Slideshow 12 most competitive housing markets for mortgage lenders

Published
  • June 21 2018, 11:20am EDT
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Limited inventory of homes for sale and rising interest rates have put a damper on mortgage activity, forcing lenders to compete more aggressively for borrowers.

But housing conditions vary by city and so too does the intensity of lender competition. One key indicator of the competitive landscape in a city is the market share concentration among the area's top 10 lenders. Less concentration leaves more room for other lenders to battle for borrowers.

And while the most competitive metros may create hurdles for the mortgage industry, these are often areas where borrowers will find the best deals, as lenders conjure up ways to incentivize consumers.

To determine how lender competition stacks up across the country, LendingTree used 2017 Home Mortgage Disclosure Act data to generate Herfindahl-Hirschman Index values for the mortgage industry. The HHI is a widely accepted statistical formula for measuring market concentration in an industry. Scores range from nearly zero to 10,000; the lower the number, the more competitive the industry.

Nationwide, the mortgage industry is relatively competitive, with an HHI score of 521. But some markets saw HHI values as low as 143, suggesting competition was much tighter in these areas.

When broken down by loan type, some metros were particularly competitive in the conventional mortgage space while others saw stronger competition for Federal Housing Administration loans. FHA markets are on average more competitive than conventional markets.

Some of the most expensive real estate markets are among the least competitive for conventional loans, but also among the most for FHA loans.

From Boston to San Antonio, here's a look at the 12 most competitive mortgage markets, ranked by the competitiveness of the overall lending activity. The data for the rankings is derived from LendingTree's HHI calculations and also includes breakouts of conventional and FHA lending competitiveness.

No. 12 Baltimore, Md.

Overall HHI value: 168
Conventional
HHI value: 197
Market share of top 10: 38%
FHA
HHI value: 210
Market share of top 10: 37%

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No. 11 Riverside, Calif.

Overall HHI value: 166
Conventional
HHI value: 207
Market share of top 10: 41%
FHA
HHI value: 185
Market share of top 10: 38%

No. 10 Tyler, Texas

Overall HHI value: 164
Conventional
HHI value: 204
Market share of top 10: 41.3%
FHA
HHI value: 334
Market share of top 10: 45.7%

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No. 9 Orlando, Fla.

Overall HHI value: 164
Conventional
HHI value: 204
Market share of top 10: 38%
FHA
HHI value: 198
Market share of top 10: 38%

No. 8 Louisville, Ky.

Overall HHI value: 163
Conventional
HHI value: 192
Market share of top 10: 38%
FHA
HHI value: 247
Market share of top 10: 41%

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No. 7 Nashville, Tenn.

Overall HHI value: 161
Conventional
HHI value: 194
Market share of top 10: 36%
FHA
HHI value: 186
Market share of top 10: 36%

No. 6 Tampa, Fla.

Overall HHI value: 158
Conventional
HHI value: 191
Market share of top 10: 36%
FHA
HHI value: 219
Market share of top 10: 40%

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No. 5 San Antonio, Texas

Overall HHI value: 158
Conventional
HHI value: 216
Market share of top 10: 40%
FHA
HHI value: 187
Market share of top 10: 39%

No. 4 Boston, Mass.

Overall HHI value: 157
Conventional
HHI value: 171
Market share of top 10: 35%
FHA
HHI value: 210
Market share of top 10: 42%

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No. 3 Hartford, Conn.

Overall HHI value: 155
Conventional
HHI value: 173
Market share of top 10: 37%
FHA
HHI value: 229
Market share of top 10: 43%

No. 2 Providence, R.I.

Overall HHI value: 147
Conventional
HHI value: 161
Market share of top 10: 34%
FHA
HHI value: 241
Market share of top 10: 43%

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No. 1 Worcester, Mass.

Overall HHI value: 143
Conventional
HHI value: 154
Market share of top 10: 30.6%
FHA
HHI value: 240
Market share of top 10: 43.1%