Jan 13, 2022 - Economy

Housing gap worsens through pandemic

Data: Zillow analysis of data from the Home Mortgage Disclosure Act (HMDA); Map: Baidi Wang/Axios

The gap between denial rates for Black mortgage applicants and white applicants grew by 10 percentage points between 2019 and 2020, analysis of the latest federal Home Mortgage Disclosure Act data from Zillow shows.

Why it matters: The report out today provides more evidence that the pandemic is impacting Black Americans disproportionately.

By the numbers: Lenders denied roughly 20% of Black mortgage applicants in 2020, which was nearly double the denial rate for white applicants. 

  • In terms of range, state by state, the denial rate was highest in Mississippi at 31% and lowest in Hawaii and Maine at under 11%. 
  • For white applicants, the denial rate was highest in West Virginia at about 15% and lowest in North and South Dakota at about 7%.

What they’re saying: “The disproportionate impact of the pandemic on Black households has stalled efforts to close gaps in credit access, homeownership, home values, and mortgage denial rates, making the journey to equity even slower than it already was,” Zillow market analyst Nicole Bachaud wrote in the report.

The big picture: Homeownership is the single most important driver of growing wealth — particularly for Black Americans, who have been held back by centuries-long segregation policies and systemic racism.

What to watch: Housing costs are soaring while mortgage rates are climbing back to where they were at the start of the pandemic, as employment and wage gains for Black Americans have stalled.

Go deeper: Race and housing in America

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