Jan 18, 2022 - Real Estate

Study: 20% of Black mortgage applicants in Ga. rejected

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

Mortgage applications submitted by Black people in Georgia were rejected nearly two times the rate of their white counterparts in 2020, according to Home Mortgage Disclosure Act data analyzed by Zillow.

Why it matters: Home ownership is the primary way to build wealth, and Black Americans have historically been shut out of this opportunity due to systemic racism and segregation policies.

  • This has created a racial generational wealth gap that persists into the 21st century.

By the numbers: According to Zillow’s report, 20.1% of Black mortgage applications in Georgia were denied in 2020, compared to 11.7% of white applications.

  • Of the 10 million people who live in Georgia, 60.2% are white, 32.6% are Black and the rest identify as Asian, Native American, Native Hawaiian or two or more races, U.S. Census Bureau data shows.

What they’re saying: Dan Immergluck, a professor at the Urban Studies Institute at Georgia State University’s Andrew Young School of Policy Studies, said he’s not surprised by the numbers.

  • Because home prices have risen since the start of the COVID-19 pandemic, people with less wealth and lower-than-average credit scores “would have trouble” obtaining a mortgage.

Yes, but: Immergluck also said discriminatory housing policies that stretch back decades, including redlining and denying FHA loans to Black borrowers, allowed white families to build wealth in the mid-20th century. This has allowed them to help their children purchase homes in higher-priced neighborhoods.

  • “A lot of that down payment is coming from their parents,” he said of some new home buyers.

Zoom out: Across the country, the denial rate for Black applicants was 19.8% versus 10.7% for white applicants.

The state with the highest denial rate to Black mortgage applicants was Mississippi at 31%. It was followed by Louisiana at 26.1%, Arkansas at 26%, South Carolina at 25.8%, Alabama at 24.4%, New York at 23.4%, Michigan at 22.2% and Florida at 21.8%.

Black applicants were denied due to credit, including a combination of poor or lack of credit, Zillow’s report states. Black people generally don’t have access to traditional financial resources, which Zillow says “contributes to poor credit health.”

Immergluck says legacy discrimination in the housing market could be remedied with down payment assistance programs for Black homebuyers using initiatives like community development financial institution funds.

Go deeper: Race and housing in America


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