Zillow: Black Mortgage Applicants Rejected at Higher Rate Than Whites

The gap in homeownership rates between Blacks and Whites adds to the disparities between the races, particularly because homeownership is a prime contributor to building financial security and intergenerational wealth.

The median net worth of homeowners is approximately 40 times the median net worth of renters, according to the Federal Reserve. In 2019, the median net worth of homeowners was $255,000, compared to $6,300 for renters.

Numerous factors contribute to reduced levels of Black homeownership, experts say, including the lingering impact of racist policies and practices.

One of those factors is the starkly higher rate Black mortgage applicants are rejected compared to Whites. A recent analysis of Home Mortgage Disclosure Act data by Zillow, an online real estate platform, found that Black applicants were denied a mortgage at an 84 percent higher rate than White applicants in 2020 — up 10 percentage points from 2019.

Zillow’s study found that 19.8 percent of Black applicants were denied a mortgage in 2020, compared to 10.7 percent of White applicants. More than one-third (37 percent) of Black applicants were denied because of credit history issues, in many cases a lack of credit history. {snip}

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