Ethnic minorities lag behind in US loan approval

Photo credit:  Cyndie

The US housing market is continuing its recovery, but ethnic minorities still lag behind when it comes to being approved for a mortgage.

Easing credit access is allowing more people to get on to the property ladder in America, according to figures from Zillow. The overall denial rate for all applicants fell from 12.4 per cent in 2013 to 11.2 per cent in 2014. Despite that improvement, though, there is still significant disparity in mortgage access among racial groups.

In 2013, 27.6 per cent of blacks who applied for a conventional home loan were denied. In 2014, that number had fallen to 23.5 percent, according to the most recent federal data released under the Home Mortgage Disclosure Act, but it remains far behind the norm.

Last year, blacks made up 12 per cent of the US population, but only 3 per cent of conventional loan applicants – and just 2.5 per cent of those approved for a conventional loan.

Hispanics make up 17.3 per cent of the US population, but represent only 6.1 percent of applicants and 5.5 per cent of approved applicants for conventional loans.

Whites, on the other hand, make up 62 per cent of the population, but 69.5 per cent of conventional loan applicants and 71.9 per cent of those approved for conventional loans.

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