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Owning a home is one of the main ways to build wealth. But for aspiring black homeowners, this can be a tough feat to reach, according to a New report from LendingTree.
Research by the Online Loan Market Corporation finds that the mortgage rejection rate for black homebuyers is twice the total number of borrowers in the nation’s 50 largest metropolitan areas.
When it comes to applying for a mortgage, an average of 18% of black borrowers are rejected compared to a rejection rate of 9% of the overall population.
LendingTree’s analysis is based on data from the Mortgage Disclosure Act of 2020.
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“The problem is there,” said Jacob, chief economist at LendingTree. “We have data to back that up.
“But there are solutions, and black homebuyers must not lose faith that they will never be able to become homeowners,” he said.
The city with the largest prevalence between mortgage rejection rates for black borrowers and the total population was St. Louis, LendingTree found, where the black rate was 20.73% versus 7.33% for the total population, with a total prevalence of 13.40 percentage points.
Boston and Jacksonville, Florida, ranked second, each with a 13.34 percentage point difference between the mortgage rejection rates for blacks and the total population. In Boston, the rate of black homebuyers was 20.85%, compared to 7.51%. In Jacksonville, it was 25.01% versus 11.67%.
Three West Coast metropolitan areas did best for black home buyers: Seattle, San Francisco, and Sacramento, California.
San Francisco came out on top by just 2.35 percentage points. At 11.79% for blacks compared to 9.44% for the total population.
Sacramento came in second with a 4.64 percentage point difference: 13.12% versus 8.48% overall. Seattle ranked third, with a difference of 4.83 percentage points: 12.74% versus 7.91%.
The channel said that while progress has been made to give aspiring black homebuyers more equality relative to the overall population, it has been slow and growing.
a recent national survey Of racial and ethnic minorities, 45% of black respondents said the home they currently live in is owned versus 55% who said it is rented.
That’s less than 65% of all respondents who said they lived in a owned home, the lowest rate compared to whites and minorities such as Latinos, Asians and Native Americans, according to a survey from NPR and the Robert Wood Johnson Foundation. She found the Harvard TH Chan School of Public Health.
“There is a lot of unconscious bias out there, and I don’t think people necessarily always realize that bias exists or how to detect it in the first place and how to prevent it,” the channel said.
For blacks facing roadblocks, it is important to remember that these are the millions of black homeowners in the United States who have been able to get loans and secure home ownership, he said.
“The first thing is not to let this completely discourage you,” the channel said.
If you feel you have been a victim of discrimination, you can report it to your state attorney general or the US Department of Housing and Urban Development.
For all homebuyers, having a solid financial profile will help improve your chances of getting a loan. This includes a strong credit score, stable income, and few missed bill payments.
There are programs that may help borrowers with low credit scores such as loans through the Federal Housing Administration, as well as programs at the state and federal levels.
The key is to remember that one rejection does not refer to all lenders, according to Channel.
“Don’t lose hope because you have one or two rejected requests,” he said.
“There are always options,” the channel added. “There may be other lenders who can work with you.”