Read next: How do you boost Black homeownership?
One saving grace: The widening gap isn’t attributable to lender bias, but the methods of assessing creditworthiness, the economist noted.
“What we’re seeing in this data is not necessarily explicit bias from the lenders themselves,” Bachaud said. “The number one reason for Black mortgage denials is based on credit – either lack of credit history, bad credit scores, some sort of derogatory mark on a credit report.”
To be sure, the issue is not new, but rooted in past nefarious practices designed to deny Black applicants home ownership. Still, the gap continues to widen despite modernity, Bachaud suggested. And some elements preying on minority borrowers continue to exist in many communities.
“The discrepancies in creditworthiness between Black and White Americans stems back to redlining before the Fair Housing Act came into place,” she said. “A lot of those effects are still largely at play in a lot of communities. There are far fewer banks and far more predatory lending institutions in Black and Brown communities across the country. Income discrepancies still exist.”