SEATTLE, April 19, 2018 /PRNewswire/ -- Mortgage
applications are denied at the lowest rate in the past 20 years,
yet a stark divide remains between potential homebuyers of
different racial groups.
Nationally, the share of applicants who are denied for
conventional mortgages has fallen to 9.8 percent, according to data
from the Home Mortgage Disclosure Act (HMDA), down from 18.1
percent in 2007.
Even though a smaller share of loan applicants overall are
denied, white or Asian borrowers are more likely to be approved for
a mortgage than black or Hispanic borrowers. In 2016, 8.1 percent
of white applicants were denied for a conventional loan, as were
10.4 percent of Asian applicants. By comparison, 20.9 percent of
black borrowers and 15.5 percent of Hispanic borrowers were turned
down for a loan.
For all groups, denial rates are down sharply from 2007. In
2007, 34.3 percent of black applicants and 30 percent of Hispanic
applicants were denied for mortgages. White and Asian borrowers
were denied 12.7 percent and 16.2 percent of the time,
respectively.
The persistent disparity among races also is evident in
homeownership. The gap between black and white homeownership rates
was slightly wider in 2016 than it was in 1900i. Black
homebuyers had the least purchasing power last year – they could
afford 55 percent of homes for sale, while white homebuyers could
buy about 78 percent of listed homesii. And while coming
up with a down payment is the biggest hurdle to homeownership for
all potential buyers, black Americans were more likely than those
of other races to say qualifying for a mortgage was a
barrieriii.
"Mortgage approval data point to both progress and stubborn
inequities in the American housing market," said Zillow® 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. For the large majority of home buyers, getting approved
for a loan is the first step on the road to homeownership, and
these continued disparities represent an ongoing barrier to housing
and social equity in America."
For all racial and ethnic groups, borrowers in suburban areas
had the best chances of being approved for a mortgage – 8.4 percent
of suburban homebuyers were denied for a loan, while 10 percent of
urban borrowers and 11.5 percent of rural borrowers were turned
down.
Metro
|
Denial Rate for
All Conventional Applications
|
Denial Rate for
Conventional Loans for Asian Borrowers
|
Denial Rate for
Conventional Loans for Black Borrowers
|
Denial Rate for
Conventional Loans for Hispanic Borrowers
|
Denial Rate for
Conventional Loans for White Borrowers
|
United
States
|
9.8%
|
10.4%
|
20.9%
|
15.5%
|
8.1%
|
New York,
NY
|
11.4%
|
11.9%
|
22.2%
|
17.1%
|
8.8%
|
Los Angeles,
CA
|
10.8%
|
11.0%
|
15.0%
|
12.5%
|
9.6%
|
Chicago,
IL
|
9.1%
|
9.6%
|
19.9%
|
16.4%
|
7.1%
|
Dallas, TX
|
7.5%
|
8.2%
|
13.8%
|
10.5%
|
5.7%
|
Philadelphia,
PA
|
7.9%
|
9.9%
|
20.5%
|
15.1%
|
5.9%
|
Houston,
TX
|
9.6%
|
10.3%
|
16.9%
|
13.5%
|
6.8%
|
Washington,
DC
|
7.7%
|
9.1%
|
16.1%
|
11.7%
|
5.2%
|
Miami, FL
|
17.0%
|
18.0%
|
25.0%
|
18.2%
|
13.3%
|
Atlanta,
GA
|
9.6%
|
9.3%
|
19.2%
|
14.4%
|
6.6%
|
Boston, MA
|
6.7%
|
7.1%
|
15.6%
|
11.6%
|
5.8%
|
San Francisco,
CA
|
8.8%
|
10.2%
|
14.5%
|
11.0%
|
6.9%
|
Detroit,
MI
|
9.4%
|
8.4%
|
20.0%
|
10.0%
|
7.9%
|
Riverside,
CA
|
11.8%
|
14.7%
|
16.0%
|
12.9%
|
9.4%
|
Phoenix,
AZ
|
8.6%
|
8.2%
|
14.2%
|
12.4%
|
7.5%
|
Seattle,
WA
|
7.5%
|
9.1%
|
16.1%
|
11.6%
|
6.3%
|
Minneapolis,
MN
|
5.0%
|
8.5%
|
12.8%
|
8.6%
|
4.3%
|
San Diego,
CA
|
9.1%
|
9.9%
|
14.4%
|
11.4%
|
8.4%
|
Saint Louis,
MO
|
7.4%
|
8.6%
|
23.9%
|
10.9%
|
6.3%
|
Tampa, FL
|
13.1%
|
12.6%
|
21.7%
|
16.4%
|
11.5%
|
Baltimore,
MD
|
8.3%
|
11.6%
|
17.0%
|
14.6%
|
5.9%
|
Denver, CO
|
6.6%
|
8.9%
|
12.0%
|
9.2%
|
5.8%
|
Pittsburgh,
PA
|
6.8%
|
8.5%
|
18.5%
|
9.4%
|
6.2%
|
Portland,
OR
|
6.5%
|
8.6%
|
8.3%
|
13.3%
|
5.7%
|
Charlotte,
NC
|
8.8%
|
9.2%
|
16.3%
|
14.5%
|
6.9%
|
Sacramento,
CA
|
9.5%
|
12.7%
|
10.2%
|
12.4%
|
7.8%
|
San Antonio,
TX
|
11.6%
|
11.2%
|
14.4%
|
15.9%
|
8.2%
|
Orlando,
FL
|
13.3%
|
16.3%
|
23.0%
|
18.4%
|
10.2%
|
Cincinnati,
OH
|
7.7%
|
8.2%
|
17.1%
|
11.0%
|
6.9%
|
Cleveland,
OH
|
6.9%
|
10.7%
|
19.9%
|
12.0%
|
5.7%
|
Kansas City,
MO
|
5.6%
|
7.6%
|
15.6%
|
13.6%
|
4.6%
|
Las Vegas,
NV
|
11.8%
|
13.6%
|
17.5%
|
12.3%
|
10.1%
|
Columbus,
OH
|
8.5%
|
10.0%
|
19.6%
|
22.2%
|
7.4%
|
Indianapolis,
IN
|
7.4%
|
9.0%
|
17.8%
|
15.4%
|
6.4%
|
San Jose,
CA
|
8.4%
|
9.0%
|
8.0%
|
9.1%
|
7.1%
|
Austin, TX
|
7.5%
|
7.1%
|
17.5%
|
11.2%
|
6.4%
|
Zillow
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inspiration and knowledge around the place they call home, and
connecting them with the best local professionals who can help. In
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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
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real estate experts and investment and market strategists to
predict the path of the Zillow Home Value Index over the next five
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Zillow is a registered trademark of Zillow, Inc.
i
https://www.zillow.com/research/homeownership-gap-widens-19384/
ii
https://www.zillow.com/research/affordable-home-listings-by-race-19419/
iii Zillow Housing Aspirations Report, September 2017
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SOURCE Zillow