Black Homebuyers Still Facing Higher Mortgage Denial Rates

While undoubted racial disparities in housing persist, Black Americans often face significant homeownership barriers, including lenders denying their mortgage applications at higher rates than the overall population.

According to a new LendingTree analysis of the 2022 Home Mortgage Disclosure Act (HMDA), data finds that the share of Black homebuyers that are denied mortgages is notably higher—approximately 1.6 times higher.

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:

• On average, 14.44% of Black homebuyers are denied a mortgage, compared to 9.14% across the overall population.
• Buffalo, NY, Raleigh, NC, and Boston have the largest percentage point differences between the denial rates for Black borrowers and the overall borrower population.
• Denial rates for Black borrowers are highest in Miami, Detroit, and New Orleans. They are the lowest in Salt Lake City, Kansas City, MO, 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%.

While racial barriers still pose a challenge for Black homeowners nationwide, 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%.

The Top 10 Metros With the Largest Spread Between Mortgage Denial Rates for Black Borrowers and the Overall Population:

1. Buffalo, NY
2. Raleigh, NC
3. Boston
4. San Francisco
5. New Orleans
6. Austin, TX
7. Milwaukee
8. Miami
9. Chicago
10. Indianapolis

The Top 10 Metros With the Smallest Spread Between Mortgage Denial Rates for Black Borrowers and the Overall Population:

1. Salt Lake City
2. San Antonio
3. Houston
4. Riverside, CA
5. San Diego
6. Baltimore
7. San Jose, CA
8. Louisville, KY
9. Birmingham, AL
10. Atlanta

Across Buffalo, NY, Raleigh, NC, and Boston, the denial rate for Black borrowers is an average of 8.89 percentage points higher than the overall mortgage denial rate. 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.

In Miami, Detroit, and New Orleans, denial rates for Black borrowers are the highest. They are the 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.

While the reasons behind the disproportionately high denial rates among Black homebuyers can be difficult to define, persistent, various factors continue to contribute to the racial disparities felt by borrowers across the country.

To read the full report, including more data, charts, and methodology, click here.