Black applicants are being denied a mortgage at an 84% higher rate than white applicants — a big jump from 2019, when the disparity was 74%. In the United States, 19.8% of black applicants are denied a mortgage, the highest among all races, and much higher than the 10.7% of white applicants who are denied. Black applicants have the highest rejection rates in Mississippi (31%), Louisiana (26.1%), Arkansas (26%) and South Carolina (25.8%).
“Homeowners have seen a large number of housing gains during the pandemic, but the growing disparity between black and white home ownership rates and home values actually paints a picture of these winners,” said Zillow, the economist. Nicole Bashod. “While credit borrowers in general are stronger now than ever before, the gap in access to credit is growing along racial lines. Policies and interventions that target barriers that prevent black Americans from owning homes are keys to achieving housing equity.”
More than 6% of black applicants were rejected based on credit history, accounting for more than a third (37%) of all black borrower rejections. Limited traditional financial services In black and other societies of color is an important factor in credit history. Black communities have more non-traditional services, such as payday lenders, which contribute to Poor credit health.
While the rate of black home ownership has risen from the depths it hit in the wake of the Great Recession, it is still well below the peak of 49.7% reached in 2004. Becoming a homeowner is the first — but not the last — step in the flight to Equivalence in housing. Black-owned home values continue to lag behind those of other races, and are still 16.7% lower than homes overall. Black-owned homes are rising in value at higher rates than homes overall, but it could take more than 22 years to catch up, at this year’s projected growth rates.
Households of color, as well as renters and low-income families, were more likely to report coincidence Housing and Economic Challenges due to the epidemic. Black households were more likely than white households to report a job or loss of income and difficulty keeping up with mortgage or rent payments. This disproportionate impact of the pandemic on black families has stalled efforts to close gaps in access to credit, home ownership, home values and mortgage rejection rates, slowing the journey to equity even more.
While there has been progress in increasing black home ownership since the Great Recession, many challenges remain on the path to achieving justice. Closing the credit and financial access gap is a good start to get more black renters down the path of home ownership. Recent adoption of Fannie Mae and Freddie Mac policies Rental payments are calculated on credit history It is a step in the right direction and a good example of how policies can be used to target these issues. Zillow recently launched a Down Payment Assist Tool in all listings for sale to help potential buyers see how many potential down payment assistance programs may be available to them.
About Zillow Group
Zillow Group, Inc. (NASDAQ: Z and ZG) Visualize real estate to facilitate unlocking the next chapter of life. As the most visited real estate website in United StateZillow® and its affiliates offer customers an on-demand experience to sell, buy, lease or finance with transparency and ease.
Subsidiaries and affiliates of the Zillow Group include Zillow®, Zillow Offers®, Zillow Premier Agent®, Zillow Home Loans™, Zillow Closing Services™, Zillow Homes, Inc. and Trulia®, Out East®, ShowTime®, Bridge Interactive®, dotloop®, StreetEasy® and HotPads®. Zillow Home Loans, LLC is an equal housing lender, NMLS #10287 (www.nmlsconsumeraccess.org).
1 The Consumer Financial Protection Bureau (CFPB) maintains a public database of data collected from mortgage lenders under the Mortgage Disclosure Act (HMDA). The data referenced in this report is from the 2020 HMDA data.