Black mortgage applicants 84% ​​more likely to be turned down than white applicants, analysis finds

The mortgage approval gap between black and white applicants has widened, according to a Zillow analysis of Home Mortgage Disclosure Act data.

Black applicants were 84% more likely to be denied a mortgage than white applicants, the data showed, an increase from the 74% disparity in 2019.

Overall, 19.8% of black applicants are denied a mortgage, while 10.7% of white applicants are denied.

“Homeowners have seen a plethora of housing gains during the pandemic, but the growing disparity between black and white homeownership rates and home values ​​paints a picture of who those gainers really are,” the economist said. de Zillow, Nicole Bachaud. “While borrowing globally is stronger than ever, the credit access gap is widening along racial lines. Policies and interventions that target the barriers preventing Black Americans from accessing homeownership are essential. to achieve housing equity.

Black applicants had the highest rejection rates in Mississippi (31%), Louisiana (26.1%), Arkansas (26%), South Carolina (25.8%), Alabama (24, 4%), Pennsylvania (23.6%), New York (23.4%), Michigan (22.2%) and Florida (21.8%), according to the analysis.

More than a third of rejections to black applicants are based on credit history. Limited financial services and the prevalence of payday lenders in communities of color contribute to poor credit health in those communities, the analysis found.

Black homeownership rates are still below the peak of 49.7% in 2004. The percentage plunged during the Great Recession and rebounded, but still sits at 44%.