Buying a house is harder when you’re black

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

In 2021, the largest segment among black mortgage applicants — 42 percent — was women who applied without a co-applicant. Black men who applied alone accounted for 34 percent, and black male-female competitors accounted for 20 percent. The gender composition of the pool of applicants was reversed for the white applicants: the largest group were male-female applicants with a share of 40 percent, followed by single men with 34 percent. Single women made up just 22 percent of white applicants.

The proportion of black women who are unmarried is higher than in white women – About half of white American women in their 40s are married, compared to a third of black women in the same age group – but the gains seen among black women applicants, particularly those who apply for a home loan alone, remain statistically significant . In 2021, 45 percent of black applicants’ applications were for conventional loans, a significant increase from 21 percent in 2010. And the success rate of black applicants’ applications had also increased: while the loan default rate — a statistic that includes loan denials and loan applications — that are withdrawn midway, and approved loans that are ultimately not accepted — for black applicants, it was 46 percent in 2008, by 2021 it had fallen to 34 percent.

For white women, the loan default rate in 2021 was 23 percent.

Still, overall, black applicants lagged behind white applicants when it came to securing mortgages. For all borrowers, the most common reason for home loan denial in 2021 was debt-to-income ratio, followed by credit history. Among black applicants who reported reason for rejection, about 34 percent of black applicants were rejected based on debt-to-income ratio versus 29 percent of white applicants.

Black borrowers were also almost three times more likely to rely on expensive loans; 14 percent of black borrowers in 2021 took out expensive loans, versus 5 percent of white borrowers.

Racism and discrimination — ingrained in federal government housing policies for decades through redlining, unequal allocation of resources, and the unequal distribution of federal funds and Jim Crow-era grants — have disadvantaged blacks, the report finds. It persists today in grading errors, homebuyer assistance fees and even the way student loan debt is calculated in loan applications, and will remain insurmountable until the guidelines themselves are fully elucidated, said Jim Carr, the report’s co-author .

“Black people are making strides in slow home ownership,” said Mr. Carr, an expert on housing finance and city policy. “But the barriers are so significant and so diverse that they will never come close to closing the gap unless the federal government takes action to repair the damage that the federal government has done.”