Mortgage application denials are at their lowest level in almost 20 years, but there remains a stark divide between loan applicants based on their race.
According to a report from Zillow based on data from the Home Mortgage Disclosure Act, just 9.8 percent of U.S.-based mortgage applicants were rejected in 2017, down from 18.1 percent in 2007. That’s certainly good news for the industry as a whole, but the data is still fairly depressing for certain demographics.
The report finds that white and Asian Borrowers are twice as likely to be granted a mortgage as black and Hispanic borrowers. In 2016, just 8.1 percent of white applicants were denied for a conventional loan, as were 10.4 percent of Asian applicants. In contrast, 20.9 percent of black borrowers and 15.5 percent of Hispanic borrowers were turned down for a loan.
Still, the good news is that denial rates are down for all racial groups. Back in 2007, 34.3 percent of all black applicants and 30 percent of Hispanic borrowers saw their loan applications turned down. Meanwhile 12.7 percent of white and 16.2 percent of Asian borrowers were also rejected.
These disparity rates are also evident in homeownership data. According to Zillow’s data, black homebuyers had the least purchasing power in 2017, being able to afford only 55 percent of all homes listed for sale in the U.S. In comparison, whites could afford 78 percent of all homes listed. The data also shows that black Americans cited being able to qualify for a mortgage as the biggest barrier to homeownership, whereas other races cited coming up with a down payment as their biggest problem.
“Mortgage approval data point to both progress and stubborn inequities in the American housing market,” said Zillow’s Senior Economist Aaron Terrazas. “By some measures, the gap in mortgage approval rates between whites and blacks is as narrow as it has ever been. However, black mortgage applicants are still more than twice as likely as whites to be denied, a visible legacy of historical discriminatory policies.”
The post Blacks twice as likely to be denied a mortgage as whites appeared first on RealtyBizNews: Real Estate News.