Black and Hispanic prospective homebuyers in metro Atlanta still have a harder time securing a home loan than white and Asian buyers, but the plight in metro Atlanta is somewhat improved when compared with national averages for the groups, according to a new report from Zillow, the online real estate marketplace.
The denial rate on a conventional loan overall in metro Atlanta was 12.3 percent, Zillow found after studying 2013 data lenders reported under the U.S. Housing Mortgage Disclosure Act. For white applicants the denial rate was 8.9 percent; for Asians, 13.4 percent; for Hispanics, 19.1 percent; and for blacks, 25.3 percent.
Nationally, the denial rate overall was 12.4 percent; for whites, 10.4 percent; Asians, 13.3 percent; Hispanics, 21.9 percent; and for blacks, 27.6 percent.
The report, which also found blacks and Hispanics are having a harder time regaining much of the equity they lost during the Great Recession, mirrors other reports that have shown the two groups lagging others when it comes to fulfilling the dream of homeownership.
Lower average wages and the inability to come up with down payments continue to hurt blacks’ and Hispanics’ efforts, Zillow said. Many less-than-creditworthy applicants who, before the recession, were able to secure subprime loans on properties with inflated values now find it hard to get a mortgage or are stuck with mortgages that remain underwater (the loan exceeds the value of the home). Foreclosures clustered in certain areas also have hurt creditworthiness.
“Black and Hispanic applicants for conventional home loans make roughly $20,000 less per year than white applicants, resulting in much higher denial rates,” Zillow Chief Economist Stan Humphries said in releasing the study. “Similarly, black and Hispanic communities are clustered in areas that saw huge run-ups in home values prior to the recession and even larger drops during the crash.”
The result is that the two groups have had a harder time regaining equity lost during the housing bust.