A report from the National Association of Real Estate Brokers (NAREB) highlights persistent disparities in mortgage lending, revealing that Black mortgage applicants are denied loans more than twice as often as white applicants. The report shows that 15% of Black families face loan denials compared to just 6% of white families.
Experts attribute this gap to institutional biases entrenched in the mortgage industry. “It is institutionalized racism,” said Bruce Marks, president and CEO of the Neighborhood Assistance Corporation of America (NACA), in an interview with Yahoo News. Marks criticized the restrictive underwriting process used by lenders, which relies on credit scores, debt-to-income ratios, and loan-to-value assessments. “These criteria fail to reflect the realities of working people and minority homebuyers,” he explained, adding that credit scoring often misrepresents readiness for homeownership by considering irrelevant factors.
According to U.S. Census data, Black homeownership remains the lowest among racial groups. In the second quarter of 2022, the homeownership rate was 75% for white households, compared to 45% for Black households. A U.S. Treasury Department analysis found that the Black-white homeownership gap in 2020 was as wide as it was in 1970, despite the 1968 Fair Housing Act’s intent to address racial discrimination in housing.
