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Black Mortgage Applicants in DC Denied at Double Citywide Rate

by Nena Perry-Brown

A new study sheds light on the pervasive pattern of racial disparities in denied mortgage applications.

Black mortgage applicants nationwide are denied at an 80% higher rate than white mortgage applicants, according to Zillow. The homeownership rate for Black households reached 44% in the first quarter of 2020, the highest it has been since 2012, yet remains behind the overall homeownership rate of 65.3%.

While some mortgage denials can be attributed to inadequate or incomplete credit profiles, research has also shown that even when controlling for incomes and credit profiles, Black mortgage applicants are still more likely to be denied.

Mortgage denial rates in DC. Click to enlarge.

Although there has been more parity with the Black homeownership rate in DC over the decades, mortgage discrimination remains. While the citywide mortgage application denial rate is 11%, the denial rate for Black applicants is twice that (albeit lower than that observed with indigenous and native Alaskan applicants). 

Denial rates in DC, by zip code. Click to enlarge.

A closer look at the data shows even more drastic disparities in certain zip codes in DC, including among Hispanic and Asian mortgage applicants. The largest mortgage denial disparity is among Hispanic applicants in the 20012 zip code, where they are denied at a rate 333% higher than typical. The second highest disparity is among Black mortgage applicants in the Penn Quarter zip code of 20004, where these applicants are denied more than 250% above the typical denial rate.

The Zillow study uses zip code-level Home Mortgage Disclosure Act data from 2017; there was insufficient zip code-level data for indigenous and native Alaskan applicants in DC.

This article originally published at http://dc.urbanturf.com/articles/blog/black-mortgage-applicants-in-dc-denied-at-double-citywide-rate/17153

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