Discrimination Seeps Into Every Aspect of Home Buying for Black Americans

And Black female prospective home buyers are applying for home loans — and being approved — at higher rates than previous years. In 2021, the number of applications from Black women, which has been climbing since 2010, jumped 14 percent. Applications from Black male prospective home buyers, in contrast, have been declining since 2017. The report did not speculate as to why.

In 2021, among Black mortgage applicants, the largest segment — 42 percent — were women applying with no co-applicant. Black males applying alone made up 34 percent, and Black male-female co-applicants comprised 20 percent. Among white applicants, gender composition of the applicant pool was flipped: The largest group was male-female co-applicants, who made up 40 percent, followed by single men, who made up 34 percent. Single women represented only 22 percent of white applicants.

The proportion of Black women who are unmarried is higher than that of white women — about half of white American women in their 40s are married, compared with one-third of Black women in the same age group — but the gains seen among Black female applicants, particularly those applying on their own for a home loan, remain statistically significant. In 2021, 45 percent of applications from Black female applicants were for conventional loans, up significantly from the 21 percent seen 2010. And the application success rate of Black female applicants was also up: whereas the loan failure rate — a statistic that includes loan denials as well as loan applications that are withdrawn midway and approved loans that are ultimately not accepted — for Black female applicants was 46 percent in 2008, by 2021, it had dipped to 34 percent.

Among white women, the loan failure rate was 23 percent in 2021.

Still, overall Black applicants trailed white applicants in securing mortgages. For all borrowers, the most common reason a home loan was denied in 2021 was debt-to-income ratio, followed by credit history. Among Black applicants for whom the reason for denial was reported, about 34 percent of Black applicants were rejected because of debt-to-income ratio, versus 29 percent of white applicants.

Black borrowers also relied on high-cost loans nearly three times more often; 14 percent of Black borrowers in 2021 took out high-cost loans versus 5 percent of white borrowers.

Racism and discrimination — baked into the federal government’s housing policy for decades via redlining, inequitable division of resources and the disparate distribution of federal funds and grants dating back to the Jim Crow era — have put Black people at a disadvantage, the report notes. It persists today in appraisal bias, fees on home buyer assistance, and even the way in which student loan debt is calculated in loan applications, and will remain insurmountable until the policies themselves are fully unraveled, said Jim Carr, the report’s co-author.

“Blacks are making progress in slowly obtaining homeownership,” said Mr. Carr, a housing finance and urban policy expert. “But the barriers are so substantial and so multifaceted that they’re never going to come anywhere near to closing the gap unless the federal government takes action that repairs the damage which the federal government did.”