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Black mortgage applicants far more likely to be rejected

Over 40% of Black mortgage applicants surveyed by NAR believe they have faced “stricter requirements because of their race”

Black homebuyers’ mortgage applications are 2.5 times as likely to be rejected as the submissions of white home shoppers.

That’s one finding from a National Association of Realtor’s report released Wednesday that reveals glaring racial disparities in an otherwise rosy home market.

The report – which culled data from the U.S. Census Bureau’s American Community Survey plus an NAR-conducted survey that 8,000 homebuyers took in 2019 and 2020 – shows that 10% of Black mortgage applicants were rejected. That compares to 6% Hispanic applicants, 4 % white and 4% Asian applicants.

Of the Black applicants rejected, the vast majority cited a high debt-to-income ratio as a factor, along with a low credit score. Black households are more than twice as likely to have student debt, the report notes, with a median $40,000 student debt load.

Racism may also play a role.


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Forty-one percent of Black mortgage applicants responded that they believed to have faced “stricter requirements because of their race” compared to 27% of Asian homebuyers surveyed, 19% of Hispanic respondents and 16% of white households.

NAR Chief Economist Lawrence Yun noted that the pandemic has produced a “K-shaped economic recovery” that has furthered racial inequality, and left racial minorities, “priced out of owning a home because of rapidly rising home prices resulting from historically-low housing inventory.”

The NAR report is couched in language about the virtue of homebuying, and how Black and Hispanic households are being shut out of the opportunity to accrue generational wealth through property ownership.

But NAR, which spent more in federal lobbying than any other group in 2020, stops short of criticizing specific political entities or financial institutions.

The Washington, D.C.-based group, instead, calls for a “more equitable and accessible home financing system,” and calls on real estate agents to be “active leaders in the fight against bias and discrimination.”

The one specific policy proposal noted is to give first-time homebuyers an immediate tax credit of $15,000, as has been proposed by President Joseph Biden’s administration.

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