Mortgage

Black residents in California trail in homeownership, mortgage approvals

Black residents in California trail in homeownership, mortgage approvals
Written by Publishing Team

“Survey says” takes a look at the various rankings and scorecards that govern geographic locations, noting that these scores are best viewed as a combination of art and data.

buzz: Referring to Martin Luther King Day, let’s admit that a black family is 43% less likely to live in California than a white family is to live in a home they own and refuse to take out a mortgage at a 48% faster rate.

Resources: Property data from the US Census Bureau for 2019 and Zillow’s analysis of federal loan rejection data from the Mortgage Disclosure Act from 2020.

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In California, 36.2% of black residents own their homes. This is the 28th best rate among all states.

South Carolina was the first state with black home ownership at 52.5%, followed by Maryland with 51.7% and Mississippi at 51%. The worst state was North Dakota with 5.2%, Wyoming with 17.5% and Montana with 19.7%.

Now, compare that with white home ownership in California at 63.1%, which is well above the rate for blacks but still the third lowest in the state. The highest rates of home ownership in the United States for white households are found in the capital at 80.5%, South Carolina 78.7% and Mississippi 78.2%. worst? Delaware 49.6% and Hawaii 58.9%.

So, when you look at the gap between the two metrics, we see that a Black California resident is 43% less likely to want to own. In the US, 34 states fared worse on this scale.

Where did we see the widest ownership gap? North Dakota ranked first with 92%, followed by Wyoming with 76% and Montana with 72%. The smallest gap was in Delaware at 31%, Maryland at 32%, and South Carolina at 33%.

Several economic factors contribute to these differences in home ownership and mortgage rejection rates.

Black California mortgage applicants are rejected 14.9% of the time, the 34th highest denial rate among states. Mississippi ranked first with 31%, followed by Louisiana with 26.1% and Arkansas with 26%. The lowest rejection rates were in Hawaii 10.5%, Maine 10.6% and Wyoming 11.5%.

California’s rejection rate for white applicants was 10.1%, the 29th highest nationally. The highest denial rate was found in West Virginia at 14.8%, then New York at 14.5% and Florida at 14.3%. Near? North Dakota 7.1%, South Dakota 7.2%, Nebraska 7.5%.

These rates translate to a black applicant in California being 48% more likely to be rejected, which is the 40th largest gap. Where did we find the biggest difference? Capital is 170%, Wisconsin 150% and South Carolina 126%.

At the other end of the loan approval spectrum, Hawaii was the only state where black residents were 10 percent more likely to be approved for a loan than white residents. Maine came next in the rankings, with blacks being 1% more likely to be rejected. Wyoming ranked third with a disapproval difference of 17%.

caveat

Over the years, I’ve heard all kinds of arguments that the real estate market today is “color blind” and that these kinds of statistics are misleading.

Note that, but these gaps, at least, reflect an enormous economic divide between black and white families. This disparity alone is problematic.

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Do you see the possessive game only one color – green?

You definitely need a lot of money and good work to be a successful buyer. But think of other drawbacks such as the mortgage-making system that relies heavily on credit scores.

Typically, these credit histories ignore rent or utilities payments—large expenses that minorities are more likely to incur. So their scores and ability to buy suffer.

Or hope for pandemic-era relief for housing. Owners – 73% of whites in the US versus 42% of blacks – are well rewarded with a government bailout of the home ownership industry.

As the coronavirus quieted the economy, fears of a real estate meltdown prompted federal measures such as supporting lenders, lowering mortgage rates and offering generous aid to owners who couldn’t make their home payments. This triggered a sudden boom in home purchases, resulting in record home price gains.

Jonathan Lansner is a trade columnist for the Southern California News Group. He can be reached at jlansner@scng.com

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