March 2024 » thefivestar.com
77
March 2024
J O U R N A L
difference decreased more in the regions
where Black family incomes increased the
highest.
Among the 50 largest metros, the
housing markets where Black families are
most likely to be mortgage-ready are:
1. Detroit (13.3%)
2. Memphis, TN (12.8%)
3. St. Louis (12%)
4. Houston (11.6%)
5. Cleveland (11.2%)
6. Pittsburgh (10.9%)
7. Columbus, OH (10.7%)
8. Oklahoma City (10.1%)
9. Baltimore (10%)
10. Birmingham, AL (9.9%)
According to the report, the majority
of Black renting families in Detroit make
enough money to buy a mortgage comfort-
ably, followed by Memphis, Tennessee; St.
Louis; and Houston.
Racial Disparities in Home Values,
Homeownership Rates, and Credit
Security
Furthermore, large differences remain
between Black and white Americans' rates
of homeownership and property values,
despite the fact that Black renting families'
wages increased more quickly during the
pandemic. In 2022, the percentage of white
households that owned a home exceeded
that of Black households by more than
thirty percentage points in almost half of
the 50 largest metros in the nation (73% vs.
44%).
The fact that a typical white family's
home is still significantly more valuable
than a typical Black family's home just
serves to exacerbate the problem. The
property value discrepancy has narrowed
somewhat, but in 42 of the top 50 metro
regions, it still stands at more than 10
percentage points.
Housing equity is further hampered
by discriminatory lending practices,
higher mortgage applicant denial rates
for Black applicants, and problems with
credit history. The denial rate of mort-
gage loans for Black applicants was 146%
higher in 2022 than for white applicants,
which could impede the transfer of wealth
between generations in the future. The
most frequent explanation given for these
"It's crucial to
recognize the
existence of
additional barriers
beyond monthly
cost, including
access to funds for a
down payment and
closing costs—as well
as other barriers
that significantly
contribute to
mortgage denials,
like insufficient
credit scores and
lack of access to
credit."
—Orphe Divounguy, Senior Economist, Zillow
