Press Releases

Black and Hispanic Applicants Twice as Likely to be Denied Mortgages

The homeownership gap between black and white households has remained the same for past 100 years

Nov 3, 2016

SEATTLE, Nov. 3, 2016 /PRNewswire/ -- White and Asian borrowers are more likely to be approved for a conventional loan than black or Hispanic borrowers, according to the latest federally released data from the Home Mortgage Disclosure Act (HMDA). The disparity persists despite improvements in mortgage access for borrowers over the last few years.

In 2015, 22.4 percent of black applicants were denied conventional loans according to HMDA data. In 2010, 30.5 percent of black applicants were denied. Among Hispanic applicants, 17.3 percent were denied in 2015, down from 25 percent in 2010.

By comparison, 10.4 percent of all conventional loan applications were denied in 2015, a drop from 14.2 percent in 2010.

"Even though conditions have improved over the past few years, getting approved for a mortgage is still a significant barrier for some would-be buyers," said Zillow Chief Economist Dr. Svenja Gudell. "Owning a home is an important way for the middle class to build personal wealth. It's encouraging to see more black and Hispanic borrowers getting approved for mortgages, but there's still a lot of progress that needs to be made."

The problem is so entrenched that last week Fannie Mae and Freddie Mac announced programs designed to improve access to credit for these groups[i], which have historically had the lowest homeownership rates[ii] even though they are more likely to place a higher value on owning a home.

According to the Zillow® Housing Confidence Index, 68 percent of Hispanic respondents and 65 percent of black respondents considered homeownership necessary to living the American Dream. By comparison, 59 percent of white respondents and 58 percent of Asian respondents felt the same.

Homeowners are becoming increasingly diverse, data from the Zillow Group Consumer Housing Trends Report show. Even so, the homeownership gap between black and white households is as wide in 2016 as it has been for the past century[iii].

Metro

Denial Rates for All Conventional Applications in 2015

Denial Rates for Conventional Loans from Asian Applicants in 2015

Denial Rates for Conventional Loans from Black Applicants in 2015

Denial Rates for Conventional Loans from Hispanic Applicants in 2015

Denial Rates for Conventional Loans from White Applicants in 2015

United States

10.4%

11.1%

22.4%

17.3%

8.7%

Atlanta, GA

9.6%

9.6%

18.9%

13.1%

7.1%

Baltimore, MD

8.1%

10.0%

16.6%

11.9%

6.2%

Boston, MA

7.0%

7.9%

17.2%

14.9%

6.0%

Charlotte, NC

8.8%

9.1%

16.0%

16.2%

7.0%

Chicago, IL

9.7%

10.7%

24.7%

18.6%

7.6%

Cincinnati, OH

8.6%

8.1%

19.8%

11.9%

7.9%

Cleveland, OH

7.7%

8.8%

19.4%

11.8%

6.7%

Columbus, OH

9.0%

10.6%

15.6%

22.0%

8.0%

Dallas-Fort Worth, TX

8.3%

9.5%

16.6%

11.9%

6.3%

Denver, CO

6.7%

8.2%

13.3%

10.3%

5.7%

Detroit, MI

9.9%

11.1%

21.0%

11.1%

8.6%

Houston, TX

9.9%

12.0%

17.7%

14.6%

6.9%

Indianapolis, IN

6.9%

9.7%

16.5%

16.0%

5.8%

Kansas City, MO

6.3%

9.9%

16.0%

14.3%

5.2%

Las Vegas, NV

12.8%

15.6%

17.3%

13.3%

10.3%

Los Angeles-Long Beach-Anaheim, CA

11.0%

11.1%

16.6%

12.9%

9.9%

Miami-Fort Lauderdale, FL

18.1%

18.7%

25.9%

20.4%

13.9%

Minneapolis-St Paul, MN

5.2%

7.2%

14.5%

13.1%

4.4%

Nashville, TN

6.9%

9.7%

16.5%

14.4%

5.9%

New York, NY

12.8%

13.8%

24.0%

19.7%

10.5%

Orlando, FL

13.6%

17.5%

22.5%

19.0%

10.7%

Philadelphia, PA

8.2%

11.4%

20.2%

13.8%

6.3%

Phoenix, AZ

9.5%

9.9%

16.8%

13.2%

8.3%

Pittsburgh, PA

7.2%

6.6%

11.7%

6.5%

6.8%

Portland, OR

6.1%

8.9%

10.3%

11.4%

5.2%

Riverside, CA

11.6%

14.8%

15.3%

13.4%

9.0%

Sacramento, CA

9.4%

13.0%

14.9%

12.8%

7.8%

San Antonio, TX

11.5%

9.2%

16.1%

16.7%

8.3%

San Diego, CA

10.2%

10.4%

16.0%

14.6%

9.6%

San Francisco, CA

8.5%

10.2%

17.6%

13.1%

6.6%

San Jose, CA

9.0%

9.3%

7.7%

11.8%

7.2%

Seattle, WA

8.1%

9.8%

19.2%

11.8%

7.2%

St. Louis, MO

8.0%

11.2%

25.0%

15.2%

6.7%

Tampa, FL

14.2%

15.9%

26.6%

18.1%

12.4%

Washington, DC

7.5%

8.8%

15.4%

12.3%

5.0%

Zillow

Zillow® is the leading real estate and rental marketplace dedicated to empowering consumers with data, inspiration and knowledge around the place they call home, and connecting them with the best local professionals who can help. In addition, Zillow operates an industry-leading economics and analytics bureau led by Zillow's Chief Economist Dr. Svenja Gudell. Dr. Gudell and her team of economists and data analysts produce extensive housing data and research covering more than 450 markets at Zillow Real Estate Research. Zillow also sponsors the quarterly Zillow Home Price Expectations Survey, which asks more than 100 leading economists, real estate experts and investment and market strategists to predict the path of the Zillow Home Value Index over the next five years. Zillow also sponsors the bi-annual Zillow Housing Confidence Index (ZHCI) which measures consumer confidence in local housing markets, both currently and over time. Launched in 2006, Zillow is owned and operated by Zillow Group (NASDAQ:Z and ZG), and headquartered in Seattle.

Zillow is a registered trademark of Zillow, Inc.

[i] http://www.fhfa.gov/Media/PublicAffairs/Pages/Prepared-Remarks-Director-Watt-at-MBA-2016.aspx 
[ii] http://www.zillow.com/research/homeownership-rate-us-housing-12961/ 
[iii] http://www.zillow.com/research/homeownership-by-race-8851/

 

SOURCE Zillow

For further information: Lauren Braun, Zillow, [email protected]


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