By Redfin
Nearly 16% of Black Americans who apply for mortgages are rejected nationwide, compared with just 7% of white Americans, according to a Redfin analysis of Home Mortgage Disclosure Act data from the Consumer Financial Protection Bureau (CFPB).
The gap is widest in Milwaukee, San Francisco, Detroit, Chicago and St. Louis, where denial rates for Black homebuyers are more than 10 percentage points higher than they are for white homebuyers. In Milwaukee and San Francisco, specifically, Black loan seekers are more than three times as likely to be denied a mortgage.
“Getting denied a loan serves a huge blow to a person’s self esteem – especially for people of color, who often feel like the world is already falling on them,” said Brittani Walker, a Redfin agent in Chicago. “My mother has been a renter since she moved out of her parents’ house. I tried to get her pre-approved for a mortgage a couple of years ago, but she was rejected because she had some blemishes on her credit. She broke down in tears and hasn’t tried again since. When people of color are stuck in this cycle of renting; their children often meet the same fate, missing out on thousands of dollars worth of home equity. If your parents never owned a home, where do you learn the value of homeownership?”
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Posted on July 8, 2020