A new report by Lending Tree has found that racial barriers to homeownership in the U.S. are undeniable for many, with Black Americans often facing the most obstacles during the homebuying process.
One obstacle Black Americans disproportionately face is having their mortgage requests denied by lenders. While mortgages are denied for people of all races, a new LendingTree analysis found that the share of Black homebuyers who have their mortgage requests denied is notably higher than the share of the overall population who sees the same.
Here’s what was found:
- The purchase mortgage denial rate for Black homebuyers is twice as high as the denial rate for the overall mortgage borrower population in each of the nation’s 50 largest metros. On average, 18% of Black homebuyers are denied a mortgage — 9 percentage points higher than the average denial rate for the overall population of 9%.
- St. Louis, Boston and Jacksonville, Fla., see the largest percentage point differences between the denial rates for Black borrowers and the overall borrower population.
- San Francisco, Sacramento, Calif., and Seattle see the smallest percentage point differences between the denial rates for Black borrowers and the overall borrower population.
- Denial rates for Black borrowers are highest in Detroit, Miami and Jacksonville, while they’re lowest in San Francisco, Seattle and Sacramento. Across Detroit, Miami and Jacksonville, the average denial rate for Black borrowers is 25.52% — more than double the average denial rate of 12.55% across San Francisco, Seattle and Sacramento.
You can see our full report here: https://www.lendingtree.com/home/mortgage/lendingtree-study-black-homebuyers-more-likely-to-be-denied-mortgages-than-other-homebuyers/
LendingTree’s Senior Economist and report author, Jacob Channel, had this to say: “Though discrimination against a homebuyer on the basis of their race is illegal, it still happens. It is for this reason that both lenders and individuals must learn to spot the signs of discrimination so that they can better avoid it.”