When it comes to making money to buy a house, it’s no secret that the path has been daunting for black Americans.
The latest report comes from data collected by the federal government from mortgage lenders under the Mortgage Disclosure Act. It shows disturbing numbers. The disparity between black and white mortgage applicants has grown broadly with the pandemic, up from 74% when black applicants were denied mortgages in 2019.
According to Zillow, about 20% of black Americans who applied for a mortgage in 2020. This was the highest denial rate of any racial or ethnic group. By comparison, Zillow reported that 10.7% of white applicants had refused a loan two years ago.
The widening gap also comes when many homeowners take advantage of higher house prices which helps increase their wealth. Of course, black Americans who do not get mortgages do not suffer from the gains.
“While credit borrowers in general are stronger now than ever, the gap in access to credit is growing along ethnic lines,” Nicole Bashod mentioned in the report. “Policies and interventions that target barriers to home ownership by black Americans are keys to achieving housing equity.”
“The high prevalence of non-traditional services (payday lenders) and the lack of traditional services (such as banks) contribute to the poor credit health of entire communities, particularly those of color,” Bashod wrote.
To boot, black Americans have been hurt more by the pandemic economy than most other groups, making the burden of recovering or saving money even more difficult.
In terms of height, Zillow found that for black Americans who bought homes, they perceived a faster growth rate in home value. “The value of black-owned homes has grown 1.5 percentage points higher than the national average as of October,” the online real estate company reported.