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Zillow: Black homeownership has risen, but not to 2004 level

The homeownership rate among Black Americans has risen at a faster-than-average rate since 2019, but it remains well below the high point reached in 2004, according to Home Mortgage Disclosure Act (HMDA) data compiled by Zillow.

Among the key findings in the analysis of 2023 HMDA data, nearly one in four (24%) Black mortgage applicants were denied, compared to only one in 10 white applicants. The rate for all applicants stands at 12.6%, showing that the denial rate for Black borrowers is almost twice that of the population at large.

Credit history, which is cited in 43% of denials attributed to applications from Black borrowers, is the predominant reason given. This rate was higher than in each of the previous two years, and was notably higher than the credit-denial rate for white borrowers (32%).

“While discriminatory policies like redlining have long been outlawed, the damage from these historic practices is still felt today,” Orphe Divounguy, a senior economist with Zillow, said in a statement. “Many communities once barred from accessing credit are now finance deserts, with few traditional financial institutions, making it harder to build credit and buy a house.

“That’s why it’s so important to expand credit access. Allowing rent payments to count in credit scores is one example of how to move the industry forward.”

Nearly 46% of Black households own their home, an improvement from the 2019 rate of 43% but well below the 2004 watershed rate of 49.7% prior to the housing crisis and Great Recession. The homeownership rate for white households is 74%.

The movement in the housing market exacerbates the economic challenges faced by borrowers of color.

“Many Black households have been left out of major wealth gains during that time,” the analysis explained. “Since the Black homeownership rate peaked in 2004, U.S. home values have more than doubled, rising 117%. Although the gap between white homeownership rates and those of Black and Hispanic households has diminished since 2019, the deficit is still large and contributes to vast inequalities in wealth.”

Zillow has crafted an interactive dashboard that includes these insights and other 2023 HMDA data. It also recently launched an open-source artificial intelligence tool that aims to remove bias and discrimination from housing-related queries.

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