Blacks and Hispanics More Than Twice as Likely as Whites and Asians to Be Denied a Mortgage
David McCormack, Daily Mail, February 9, 2015
A shocking new study has found that people from the black and Hispanic communities are denied mortgages at more than twice the rate of whites and Asians.
The study by online real estate database Zillow found that white people who apply for a conventional mortgage are denied just over 10 percent of the time and Asians 13.3 percent.
By contrast, blacks who apply for the same loans are denied nearly 28 percent of the time and Hispanics are denied 22 percent of the time.
‘It’s clear that the housing playing field remains strikingly unequal in this country,’ said Zillow Chief Economist Stan Humphries.
One reason said Humphries is that whites tend to make more money than blacks and Hispanics, which makes qualifying for a loan much easier.
‘Black and Hispanic applicants for conventional home loans make roughly $20,000 less per year than white applicants, resulting in much higher denial rates,’ he said.
According to Zillow’s analysis of 2013 race and homeownership data from the federal government, the overall homeownership rate in the U.S. is 63.5 percent.
Among whites the rate is 71.1 percent, compared to 57.8 percent for Asians, 41.9 percent for blacks and 45.2 percent for Hispanics.
The difference in home ownership between black and white households is the same now as it was in 1900, reports CNN Money.
Prices in neighborhoods with a higher concentration of blacks and Hispanics grew faster during the boom, and fell even harder when the housing bubble burst.
‘Black and Hispanic communities are clustered in areas that saw huge run-ups in home values prior to the recession, and even larger drops during the crash,’ said Humphries.
But there are some reasons for optimism according to Humphries.
‘Home values in black and Hispanic communities are expected to rise faster over the coming year, and the data shows that Federal Housing Administration-backed loans have proven to be a viable and critical source of financing in minority communities,’ he said.
The racial divide in home prices can be partly explained by geography and the discrepancy is most intense in some of the nation’s most volatile markets.
In Los Angeles, home prices in black and Hispanic neighborhoods are still 20 percent below peak levels, while prices in the city’s white enclaves have rebounded sharply and have appreciated beyond previous peaks in the Asian communities.
