Black homebuyers are 1.7 times more likely to be denied a mortgage: study

The home ownership rate among Black households in the U.S. is increasing, but so is the gap between Black homeownership and other races, a new analysis found. 

According to a report from LendingTree, Black homebuyers are 1.7 times more likely to be denied a mortgage compared to all homebuyers, and nearly 20% of mortgage applications from Black homebuyers are denied nationwide. 

Cities with the highest denial rate disparities

By the numbers:

In 2022, the denial rate for all borrowers in the top 50 metros in the U.S. was 9.14%, but the denial rate for Black borrowers was 14.44%. In 2024, the denial rate for all borrowers was 9.47%, but the denial rate for Black borrowers was 14.27%. Nationwide, the denial rate for Black applicants was 19.00% in 2024, compared with 11.27% for all applicants — a gap of 7.73 percentage points.

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Two Michigan cities – Grand Rapids and Detroit – top the list for the biggest disparities between Black borrowers and other borrowers. In both cities, Black buyer denial rates exceed 20%. 

The following cities have the highest Black homebuyer denial rates compared to all other buyers: 

Cities with the lowest denial rate disparities

The following cities have the lowest Black homebuyer denial rates compared to all other buyers: 

The city with the lowest gap between Black borrower denial rates and all other denials is Salt Lake City, Utah, where the Black denial rate is only .24 points higher than its overall rate. Three cities in California and three cities in Texas rank among the bottom 10 for the lowest gaps. 

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Why are denial rates higher for Black borrowers? 

Big picture view:

LendingTree says debt-to-income (DTI) ratio is the No. 1 reason for mortgage denials for Black or all borrowers, but credit history is a bigger problem for Black applicants. In 2024, DTI ratios accounted for 34.02% of all denials, compared with 34.08% among Black applicants. However, credit history was the main reason in 24.85% of all denials, compared with 33.16% among Black borrowers, an 8.31-point gap.