Racial Disparities Still Stark in Home Loans, Ownership: Zillow

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Black and Hispanic Americans are twice as likely as white Americans to be denied a mortgage, according to a new report.

The report, released Monday by online residential real estate marketplace Zillow, found that 27.6% of black home mortgage applicants and 21.9% of Hispanic applicants were rejected, while 10.4% of white applicants were rejected. Zillow looked at Home Mortgage Disclosure Act data and combined it with its own valuation data.

According Zillow’s release announcing the report, the company’s analysis found that “federal mortgage denial data by race reveals persistent housing performance and access-to-credit issues for racial and ethnic minorities across the country.”

“While many of the disparities between the experiences of white communities and minority communities during the housing boom and bust can be explained by plain differences in finances and geography, it’s clear that the housing playing field remains strikingly unequal in this country,” said Zillow Chief Economist Stan Humphries in a released statement.

Zillow did elaborate that it’s hard to separate how much of this might be from outright housing discrimination and redlining from racial income disparities driven by other economic and societal factors beyond the control of loan originators. “Black and Hispanic applicants for conventional home loans make roughly $20,000 less per year than white applicants, resulting in much higher denial rates,” Humphries said in the release.

Humphries also added that rising home prices in black and Hispanic neighborhoods, which were hit disproportionately by the recession, and increased approval for minorities on Federal Housing Administration-backed loans were signs of hope.

According to Zillow, homeownership in the U.S. stands at 63.5% overall. Black homeownership stands at 41.9%, while 45.2% of Hispanics own their home. White homeownership ran slightly ahead of the national homeownership rate at 71.1% while Asian homeownership was above other minorities, at 57.8%, though still lagging behind the overall homeownership rate.

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