Here’s where Black homebuyers are most likely to be denied a mortgage

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Racial barriers to homeownership in the U.S. are an undeniable reality for many, with Black Americans often facing the most obstacles when it comes to the homebuying process.

A new study from LendingTree, one of the nation’s leading online loan marketplaces, highlights one of the biggest hurdles that disproportionately impacts Black homebuyers: being denied for a mortgage. Specifically, LendingTree’s study looks at the spread in mortgage denial rates between Black Americans and the overall population in each of the nation’s 50 largest metropolitan areas.

For both purchase and refinance mortgages, LendingTree found that Black Americans are more likely to be denied a home loan than the overall population of homebuyers.

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Methodology

To conduct this study, LendingTree analyzed mortgage application records from the Federal Financial Institutions Examination Council’s Home Mortgage Disclosure Act 2020 data set, the most recent available. It includes mortgage applications submitted in 2019.

The data in this study was analyzed on the Metropolitan Statistical Area or “MSA” level.

Here are the 15 metro areas where Black borrowers are most likely to experience lending bias:

Image Credit: DepositPhotos.com.

15. Birmingham, Alabama

Overall mortgage denial rate: 6.05%

Mortgage purchase denial rate
for Black homebuyers: 12.95%

Spread in mortgage purchase
denial rates between Black
homebuyers and the overall
population of homebuyers: 6.90%

Image Credit: DepositPhotos.com.

14. Providence, Rhode Island

Overall mortgage denial rate: 6.66%

Mortgage purchase denial rate for Black homebuyers: 13.59%

Spread in mortgage purchase denial rates between Black homebuyers and the overall population of homebuyers: 6.93%

Image Credit: iStock.

13. Buffalo, New York

Overall mortgage denial rate: 5.56%

Mortgage purchase denial rate for Black homebuyers: 12.69%

Image Credit: Deposit Photos.

12. Raleigh, North Carolina

Overall mortgage denial rate: 5.39%

Mortgage purchase denial rate for Black homebuyers: 12.58%

Image Credit: iStock/Mark Howard.

11. New York, NY

Overall mortgage denial rate: 8.53%

Mortgage purchase denial rate for Black homebuyers: 15.87%

Image Credit: DepositPhotos.com.

10. Atlanta, Georgia

Overall mortgage denial rate: 7.95%

Mortgage purchase denial rate for Black homebuyers: 15.36%

Image Credit: DepositPhotos.com.

9. Nashville, Tennessee

Overall mortgage denial rate: 5.59%

Mortgage purchase denial rate for Black homebuyers: 13.24%

Image Credit: iStock/Vito Palmisano.

8. Philadelphia, Pennsylvania

Overall mortgage denial rate: 5.87%

Mortgage purchase denial rate for Black homebuyers: 13.57%

Image Credit: iStock/vichie81.

7. Cincinnati, Ohio

Overall mortgage denial rate: 5.48%

Mortgage purchase denial rate for Black homebuyers: 13.42%

Image Credit: NatChittamai.

6. Indianapolis, Indiana

Overall mortgage denial rate: 5.44%

Mortgage purchase denial rate for Black homebuyers: 13.54%

Image Credit: Pixabay.com.

5. Pittsburgh, Pennsylvania

Overall mortgage denial rate: 5.40%

Mortgage purchase denial rate for Black homebuyers: 14.16%

Image Credit: iStock/f11photo.

4. Detroit, Michigan

Overall mortgage denial rate: 6.91%

Mortgage purchase denial rate for Black homebuyers: 16.58%

Image Credit: iStock/espiegle.

3. Cleveland, Ohio

Overall mortgage denial rate: 5.47%

Mortgage purchase denial rate for Black homebuyers: 15.22%

Image Credit: DepositPhotos.com.

2. St. Louis, Missouri

Overall mortgage denial rate: 5.21%

Mortgage purchase denial rate for Black homebuyers: 16.19%

Image Credit: iStock.

1. Milwaukee, Wisconsin

Overall mortgage denial rate: 5.57%

Mortgage purchase denial rate for Black homebuyers: 17.73%

Image Credit: DepositPhotos.com.

Refinancing is even worse

The disproportionate number of mortgage denials is even worse when it comes to refinancing as you’ll see in the following data. These five cities have the largest discrepancy in refinancing rates for Black borrowers. 

Image Credit: DMEPhotography / iStock.

5. Sacramento, California

Overall mortgage refinance denial rate: 20.36%

Mortgage refinance denial rate for Black homeowners: 39.48%

Image Credit: DepositPhotos.com.

4. San Antonio, Texas

Overall mortgage refinance denial rate: 19.75%

Mortgage refinance denial rate for Black homeowners: 39.42%

Image Credit: Deposit Photos.

3. Denver, Colorado

Overall mortgage refinance denial rate: 20.98%

Mortgage refinance denial rate for Black homeowners: 41.98% 

Image Credit: DepositPhotos.com.

2. Philadelphia, Pennsylvania

Overall mortgage refinance denial rate: 11.59%

Mortgage refinance denial rate for Black homeowners: 33.82%

Image Credit: Pixabay.com.

1. Phoenix, Arizona

Overall mortgage refinance denial rate: 12.51%

Mortgage refinance denial rate for Black homeowners: 35.08%

This article originally appeared on LendingTree.com and was syndicated by MediaFeed.org.

Image Credit: DepositPhotos.com.

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