When it comes to earning money to buy a home, it’s no secret that the path has been terrible for black Americans.
The most recent report comes from data collected by the federal government from mortgage lenders under the Home Mortgage Disclosure Act. It shows worrying figures. The disparity between black and white mortgage applicants has increased dramatically with the pandemic, from 74% when black applicants were rejected for mortgages in 2019.
According to Zillow, about 20% of black Americans who applied for a mortgage in 2020 were turned down. This was the highest refusal rate for any racial or ethnic group. By comparison, Zillow reported that 10.7% of white applicants were denied a loan two years ago.
The widening gap also comes as many homeowners benefit from rising house prices, which helps to increase their wealth. Of course, black Americans who don’t get mortgages don’t enjoy the gain.
“While credit borrowers overall are stronger than ever, the credit access gap is widening along racial lines,” said economist Zillow. Nicole Bachaud indicated in the report. “Policies and interventions that target barriers preventing Black Americans from home ownership are essential to achieving housing equity.”
“A higher prevalence of non-traditional services (payday lenders) and fewer traditional services (like banks) contribute to the poor credit health of entire communities, especially communities of color,” Bachaud wrote.
To boot, black Americans have been hit harder by the pandemic economy than most other groups, which further increases the burden of recovering or saving money.
On the uplifting side, Zillow found that black Americans who bought homes realized a faster rate of growth in home value. The online real estate company reported, “Black-owned homes rose in value at a rate 1.5 percentage points above the national average in October.”