Lenders denied mortgages for Black applicants at an 80 percent higher rate than white applicants – and 120 percent more often when applying for a conventional loan, according to an analysis released Tuesday by Zillow.
The analysis, based on a review of federal data from the Home Mortgage Disclosure Act, found that credit history was the reason for one-third of Black applicants who are denied a mortgage, compared to about 25 percent of white applicants.
“At a time when racism is at the front of many Americans’ minds, the disparity in mortgage rate denials is yet another reminder that the housing market – and country – have not done enough to address inequities and heal the scars from an unjust past,” Zillow economist Joshua Clark said. “The mortgage approval process is rooted in a racially unjust history that persists to make homeownership a far more difficult dream to achieve for many Black Americans. Owning a home is a major way to generate, keep and pass down wealth, and unequal access to mortgages only serves to further entrench inequality.”
Zillow survey data finds that 59 percent of Black home buyers are concerned about qualifying for a mortgage in the first place, compared to 46 percent of white buyers.
Zillow also said that Black homeownership rates have climbed to 44 percent, but remain far below the overall homeownership rate of 65.3 percent.