Racial Slur a Reason for The Growing Gap In Homeownership

A new analysis by the Federal Reserve Bank of Philadelphia found that in the state, black mortgage applicants were nearly three times more likely to be denied by lenders compared to white applicants.

Researchers say this is the reason for the widening homeownership gap between Black and white Philadelphians over the last 3 decades and is also the solution to curb the decline.

Theresa Y. Singleton, the report’s authors and a senior vice president at the bank, said that this is affecting the Philadelphia economy. 

She rightly points out that it is the homeowners that bring taxation and increase the consumption in a state and country.

The report notes that Black mortgage applicants have faced challenges because of their limited credit histories, not-so-good credit scores, and higher debt-to-income ratios. 

29% of rejection was because of credit history, of Black applicants compared to 16% denial to white applicants.

Researchers also found that now the rising home prices, and declining household incomes among Black residents, are further leading to the homeownership gap in Philadelphia.

For the past two decades, the median home value in Philly rose from two-and-a-half times to five times the median income of Black households.

Lastly, the report also highlights the ongoing impact of redlining, which is a discriminatory practice dating back to the 1930s where mortgage lenders denied loan applications based on race.