Owning your own home is still very much the American dream, but a recent report by Zillow and the National Urban League looked at recent trends affecting minority access to property and the different experiences people have had when applying for a mortgage. In addition the report shows how the outcome in a number of different areas can differ for white Americans compared to minority groups.
This report used data from the Home Mortgage Disclosure Act and the Zillow Home Value Index data, as well as information obtained from a survey carried out especially for this study. Home buying and homeownership tends to be affected by income levels, credit scores and education levels, and while there was insufficient evidence in the data used to show illegal discrimination, it did highlight the differences in resources and qualifications between different races.
According to the report in RisMedia, Hispanics and blacks applying for a mortgage are likely to have lower credit scores and lower average incomes compared to Asians and whites. In addition Asian people are more likely to have completed their education to a higher level, leading to a correspondingly higher income. Not surprisingly this leads to differences in the down payments that people are able to afford as Asians are likely to put down 20% or more, while for other races this figure is much lower.
There is further diversity in the home mortgage application experience, as even though the 12.1% of the US population is black, in 2012 they filed just 6% of all mortgage applications. Some 17.3% of the population is Hispanic, and they filed 9.4% of mortgage applications in 2012. In comparison 63% of the population is white, and they filed 64.8% of mortgage applications for 2012.
Most people, regardless of race recorded applying for a mortgage as being a positive experience and only a minority felt race had been a factor in the application process, although it’s not clear whether they felt this was positive or negative. Some 14% of whites felt race had been a contributing factor compared to 25% of Asians, 33% of blacks and 37% of Hispanics. Those who did feel race was a factor were more likely to have shopped around for different mortgage quotes, with Asians and Hispanics being more likely to have considered multiple loans from different lenders, and they were more likely to have two or more mortgage applications. Blacks and Hispanics were more likely to recommend a lender to friends or family, while Hispanics and Asians were more likely to choose the lender who had been recommended to them.