If You’re Black In The Big Apple, Homeownership Is Tough
Getting a mortgage in New York City is tough for everyone, according to DNAinfo, but it is particularly tough for Black Americans.
In the Big Apple, 18 percent of all mortgage applications are rejected — compare this to the national average of 12 percent, according to researchers from StreetEasy, a real estate service. Naturally, rejection rates are higher in the city because of its high prices. But when we zoom in on African-Americans, the figures drastically jump.
Denial rates for Blacks hover at around 34 percent — twice that of White households — which saw 16 percent of their loan applications thrown by the wayside.
“When it comes to achieving homeownership here in the city, race matters,” StreetEasy’s Alan Lightfeldt said.
Lead investigators discovered that Blacks applied for mortgages at a much lower rate than Whites. Even though African Americans (and Latinos) represent 51 percent of the New York City population, their submissions only make up 11 percent of the Big Apple’s mortgage applications.
In New York City, the homeownership rate by race and ethnic group are as follows: 42 percent for Asians, 27 percent for Blacks, 16 percent for Latinos, and 41 percent for Whites.
Why is the homeownership rate for Blacks this low? According to Lightfeldt, socioeconomic factors, such as poor credit and low income, play a big part of the problem. But Matthew Hassett from the Center for NYC Neighborhoods says discrimination is another culprit.
“Most recently, these communities of color were particularly hard hit because of predatory lending,” he said. Hassett added that despite the fact Blacks represent a small fraction of New York homeowners, they make up 30 percent of all scam victims.
Hassett also pointed out that the Great Recession left the Black community in shambles and contributes to their difficulties in owning a home. “In New York City, like a lot of parts of the country, wages are stagnant and have been stagnant for years, and it’s very hard to qualify for a mortgage right now,” he said.
Hassett concludes that even for the middle class, homeownership is out of reach. It’s time for New York City, he says, to create initiatives that support affordable housing.
“If we don’t,” Hassett warns, “there’s going to be a continued turnover of homes to investors, which we are already seeing.”