This brief presents analyses of Black-White gaps in homeownership, mortgage market activity, and barriers to accessing mortgage credit, as well as investor-buyer mortgage activity in 10 Southeastern cities.
In 8 of the 10 cities homeownership gaps have grown over time, and in all 10 cities Black mortgage applicants were more likely to be denied conventional loans than White applicants with similar financial qualifications.
At the most affordable price points, where many Black homebuyers are active, there is significant competition from investors who have been more successful at accessing conventional mortgage credit.
While increasing equitable access to mortgage credit is key to reducing homeownership gaps, the relationship between longer-term ownership trends and recent mortgage market activity is not always straightforward; some cities made progress on some measures but not on others.
Our findings on the financial drivers of racial mortgage denial gaps underline the importance of strategies to address factors like Debt to Income and Loan to Value ratios that are effectively excluding a segment of Black buyers from the market. But given the persistence in racial denial gaps among well-qualified applicants, it remains critically important to address potential racial discrimination in violation of the federal Fair Housing Act.
Emily Dowdall is President of Policy Solutions at Reinvestment Fund. She works with government, philanthropic, nonprofit, and other civic leaders across the country to support strategic decision-making to strengthen communities. Ms. Dowdall leads a team of skilled analysts in conducting research and building analytic tools that help stakeholders implement effective interventions and address entrenched challenges. Her expertise includes approaches to understanding and intervening in housing markets, strategies to stabilize households and neighborhoods, affordable housing needs, fair housing, early child education access, and program evaluation.
As Chief Policy Analyst at Reinvestment Fund, Dr. Michael Norton supports all research related to Reinvestment Fund’s organizational goals and mission. Dr. Norton completed his doctoral studies in the Sociology Department at Temple University, where his research examined the relationship between secondary mortgage market activity and neighborhood change in the Philadelphia region at the turn of the 21st century.
Alana Kim is the Civic Data Manager for Reinvestment Fund’ Policy Solutions group. In this role she maintains and improves department data infrastructure and practices, and support projects on matters of data – including discovery, curation, analysis, preservation, and visualization.
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