Black homebuyers are denied mortgages at twice the rate of overall population, new analysis shows

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Black American homebuyers are far more likely to have their mortgage requests denied when compared to the overall borrower population, with even wider disparities seen in cities like Boston and Jacksonville, according to a new LendingTree analysis.

In fact, drawing on 2020 Home Mortgage Disclosure Act data, LendingTree found that, on average, the purchase mortgage denial rate for Black homebuyers in each of the nation’s 50 largest metropolitan areas was twice as high: An average of 18% of Black homebuyers were denied a mortgage, while the average denial rate for the overall population was 9%.

In some cities, that spread was even worse: In St. Louis, Mo., the mortgage denial rate for Black homebuyers was 20.73%, compared to the overall purchase mortgage denial rate of 7.33%, the worst gap LendingTree observed.

Other cities with significant disparities between the rate of Black homebuyers’ mortgage denials compared to the overall borrower population were Boston, Jacksonville, Raleigh, New Orleans, Pittsburgh, Oklahoma City, Richmond, Detroit and Chicago. Cities with the smallest gap included San Francisco, which had an overall purchase mortgage denial rate of 9.44% compared to a denial rate of 11.79% for Black homebuyers, as well as Sacramento and Seattle. 

“Though discrimination against a homebuyer on the basis of their race is illegal, it still happens,” Jacob Channel, LendingTree senior economist and the report’s author, said in a statement. “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.”

Indeed, for generations, Black Americans have found it difficult — if not impossible — to get money to buy a home, often by design. That has contributed to a yawning racial wealth gap. 

‘Millions of Black Americans own their homes despite many of the heightened obstacles they may have faced.’


— LendingTree report

Perhaps most infamously, the Home Owners Loan Corporation drew maps in cities across the country to delineate neighborhoods it deemed “risky” for lending in the 1930s. Black neighborhoods were often marked in red to demonstrate their supposed “hazard,” and denied access to fair credit as a result

While the 1968 Fair Housing Act outlawed the practice of redlining, other housing disparities that deny Black people their full ability to build wealth persist to this day: Homes in Black neighborhoods tend to have lower property values, yet their owners have routinely experienced greater tax burdens, for example.

One 2018 analysis of lending disparities also uncovered “modern-day redlining” that denied Black and Latino people in dozens of metro areas a shot at homeownership, even after controlling for factors like income.

Mortgage denial rates may also remain high for Black Americans due to lower incomes and household wealth when compared to other racial groups, LendingTree noted in its analysis, though those disparities can similarly be tied back to racist policies and practices that sought to depress opportunities for Black people

LendingTree recommended that Black borrowers shop around for a mortgage lender, consider various types of loans if they’re having difficulty getting approved for a standard mortgage, and file a complaint with a local, state or federal authority if they feel discriminated against in the process. 

“Millions of Black Americans own their homes despite many of the heightened obstacles they may have faced,” the report said. 

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