As a result of racial disparities in the mortgage and housing markets, Black applicants were denied a mortgage at a rate 84% higher than white applicants, according to 2020 data from Zillow. Nationwide, 19.8% of Black applicants were denied a mortgage compared to 10.7% of white applicants, and states like Mississippi, Louisiana, Arkansas, and South Carolina reported the highest denial rates at 31%, 26.1%, 26%, and 25.8%, respectively.
Throughout the pandemic, households of color were more likely than white households to experience economic challenges like job or income losses, which made mortgage and rent payments unaffordable. The disproportionate impact of a pandemic-driven economic crisis made it more difficult for Black homeowners to close gaps in credit access, home values, and mortgage denial rates.
The Black homeownership rate has rebounded modestly from recent lows, but remains below its early 2000s peak as racial disparities in the mortgage and housing markets widened throughout the early part of the pandemic, according to a Zillow analysis of data from the Home Mortgage Disclosure Act (HMDA).
And while Black homeownership has risen to 44% currently from a recent low of 40.6% reached in Q2 2019, it remains far below the peak of 49.7% set in 2004. Meanwhile the access gap between Black and white mortgage applicants continues to grow, setting Black would-be homeowners farther back from well-established wealth- and community-building benefits of homeownership than their white peers. This is partly a result of longstanding income and credit disparities that only deepened during the pandemic.
Advertisement
Related Stories
Affordability
How Much Income Do First-Time Buyers Need to Afford the Average Home?
The median-priced home is unaffordable in 44 of the 50 largest U.S. metro areas
Affordability
What Is the Relationship Between Urban vs. Suburban Development and Affordability?
A new paper from Harvard's Joint Center looks at whether expanding the supply of suburban housing could, in turn, help make dense urban areas more affordable
Market Data + Trends
10 States Where Home Insurance Rates Have Risen the Most
Responding to the increasing number of natural disasters, insurers are hiking prices, with some states bearing the brunt more than others