Higher Fees, Interest Rates, and Mortgage Rejections for Black, Hispanic Buyers
Despite having similar financial situations, Black and Hispanic homebuyers are more likely to be denied mortgages compared to White buyers, according to Realtor.com’s analysis of 2019 mortgage data. When able to receive a mortgage, Black and Hispanic borrowers are more likely to pay higher fees and interest rates. The rate for mortgage application rejection for Black applicants is double that of a White applicant, Realtor.com found. According to the analysis of 7.2 million loan applications, Black applicants are rejected 11.7% of the time while White applicants are rejected 5.5% of the time.
Black buyers were twice as likely to be refused mortgages than whites, according to the realtor.com analysis of 7.2 million loan applications in 2019. Only about 5.5% of whites had their loan applications rejected, compared with 6.8% of Asians, 9.3% of Hispanics, 11.7% of Blacks, and 10.8% of multi-minority race individuals hoping to be approved. These denials were only for applicants where all the data was available for fully completed applications that weren't withdrawn.
Decades of discrimination against people of color have resulted in lower homeownership rates among minorities than among whites in America. And that has a deep, long-term impact on wide swaths of America, since homeownership is traditionally how generations have catapulted themselves into the middle class, as their properties appreciate in value over time.