Black Homebuyers 1.6 Times More Likely to Be Denied a Mortgage Than Overall Population [New LendingTree Study]

Black Americans often face significant homeownership barriers, including lenders denying their mortgage applications.

A LendingTree analysis of 2022 Home Mortgage Disclosure Act (HMDA) data finds that the share of Black homebuyers denied mortgages is notably higher than the share among the overall population.

Specifically, we found that the purchase mortgage denial rate for Black homebuyers across the 50 largest U.S. metros is an average of 5.30 percentage points higher than the denial rate for the overall mortgage borrower population.

Key findings

• In each of the nation’s 50 largest metros, Black homebuyers are more likely to be denied a purchase mortgage than the overall population of homebuyers. On average, 14.44% of Black homebuyers are denied a mortgage — 5.30 percentage points higher than the average denial rate of 9.14% across the overall population.
• Buffalo, N.Y., Raleigh, N.C. and Boston have the largest percentage point differences between the denial rates for Black borrowers and the overall borrower population. Across these metros, the denial rate for Black borrowers is an average of 8.89 percentage points higher than the overall mortgage denial rate. Plus, their respective denial rates for Black borrowers of 18.43%, 15.89% and 16.16% are higher than those in most of the nation’s other largest metros.
• Salt Lake City, San Antonio and Houston see the smallest percentage point differences between the denial rates for Black borrowers and the overall borrower population. The average spread between denial rates in these three metros is a relatively low 1.78 percentage points.
• Denial rates for Black borrowers are highest in Miami, Detroit and New Orleans and lowest in Salt Lake City, Kansas City, Mo., and Minneapolis. Across Miami, Detroit and New Orleans, the average denial rate for Black borrowers is 20.70% — more than double the average denial rate of 10.19% across Salt Lake City, Kansas City and Minneapolis. Though denial rates for Black borrowers can vary across the nation’s 50 largest metros, they’re higher than 10.00% in all but one — Salt Lake City, with a denial rate of 9.24%.
• The spread between denial rates for Black applicants and the overall population of applicants decreased from 2021 to 2022. The average spread was 5.59 percentage points in 2021, slightly higher than 5.30 percentage points in 2022. From 2021 to 2022, the denial rate for Black borrowers across the country’s largest metros decreased from an average of 16.35% to 14.44%.

• Metros with the largest spread between mortgage denial rates for Black borrowers and the overall borrower population

  1. Buffalo, NY
  2. Raleigh, NC
  3. Boston, MA
  4. San Francisco, CA
  5. New Orleans, LA

  Metros with the smallest spread between mortgage denial rates for Black borrowers and the overall borrower population

  1. Salt Lake City, UT
  2. San Antonio, TX
  3. Houston, TX
  4. Riverside, CA
  5. San Diego, CA

  You can check out our full report here: https://www.lendingtree.com/home/mortgage/lendingtree-study-black-homebuyers-more-likely-to-be-denied-mortgages-than-other-homebuyers/

  LendingTree's Senior Economist and report author, Jacob Channel, had this to say:

  "Housing discrimination on the basis of race is illegal, but it still happens. Owing to this, both lenders and individual buyers must learn to spot the signs of discrimination and must not be afraid to speak up when they witness or are the victim of discriminatory policies."

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