Mortgage market inequality is persisting
Black Americans remain significantly more likely to be denied a mortgage than other borrowers, a new analysis shows, highlighting persistent racial disparities in US homeownership.
According to a LendingTree study released last week, Black homebuyers faced a nationwide mortgage denial rate of 19% in 2024—1.7 times higher than the 11.27% rate for all applicants. The report, based on Home Mortgage Disclosure Act (HMDA) data, shows that despite efforts to expand access to homeownership, systemic barriers continue to affect Black borrowers.
“High mortgage denial rates continue to be a big deal for Black Americans because it means that many are not getting access to one of the best wealth-building tools anyone can have,” said LendingTree chief consumer finance analyst Matt Schulz. “Home ownership isn’t without its challenges, but it can change lives. Being denied that opportunity isn’t just heartbreaking. It can make getting ahead financially much harder.”
The study found notable variations in denial rates across the 50 largest US metropolitan areas. Grand Rapids and Detroit, both in Michigan, recorded the highest disparities, with Black mortgage denial rates exceeding 20%. In Grand Rapids, the gap between Black applicants and all borrowers reached 9.75 percentage points. Raleigh, North Carolina, followed closely with an 8.44-point difference.
At the other end of the scale, Salt Lake City reported the smallest denial rate gap—just 0.24 points higher for Black applicants. San Antonio, Texas, and Fresno, California, also ranked among the metros with the narrowest disparities.
Debt and credit remain barriers
While debt-to-income (DTI) ratios were the most common reason for mortgage denials across all applicants, credit history posed a larger challenge for Black borrowers. In 2024, 33.16% of mortgage denials for Black applicants cited credit history, compared with 24.85% for all borrowers—an 8.31-point gap.
Though mortgage denial rates slightly narrowed in recent years—dropping from a 5.30 percentage point gap in 2022 to 4.80 in 2024—the overall homeownership gap remains pronounced.
As of 2023, the national homeownership rate was 65.2%. Among Black households, it stood at 44.7%, trailing behind white (72.4%), Asian (63.4%), and Hispanic (51.0%) households.
Despite modest gains in Black homeownership over the past decade, the racial gap in homeownership rates has widened from 27% in 2013 to 28% in 2023, underscoring the ongoing challenges faced by Black Americans in accessing housing opportunities.
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