NEW YORK CITY — It's harder to get a mortgage loan in the five boroughs than it is for the rest of the country — and it's especially difficult for blacks and Hispanics, according to a new analysis by real estate search engine StreetEasy.
Nationwide, roughly 12 percent of mortgage applicants are denied. In New York City, more than 18 percent are, StreetEasy researchers found, looking at 2013 mortgage data. The higher denial rates are likely because the city's higher prices require larger loans, StreetEasy's Alan Lightfeldt said.
Looking at a breakdown among racial groups, there are stark disparities. Denial rates are greatest for black households — nearly 34 percent of applicants are denied — which was almost double the rate of white families, which saw nearly 16 percent of loan applications denied.
"When it comes to achieving homeownership here in the city, race matters," Lightfeldt said.
Black and Hispanic families also applied for mortgages at much lower rates than white or Asian families.
Despite comprising more than 51 percent of the city’s population, blacks and Hispanics, for instance, submitted only about 11 percent of the city’s conventional mortgage applications, StreetEasy found.
The disparities were especially apparent in The Bronx, where, for example, Hispanics account for nearly 55 percent of the population yet they represent just 25 percent of all conventional mortgage applications, and only 10 percent of the borough's Hispanics own their own homes, the second lowest rate for the group behind Manhattan.
"If you are black or Hispanic, there are certainly more obstacles," Lightfeldt noted, including "socioeconomic factors — like lower incomes and typically lower credit scores."
Matthew Hassett, of the Center for NYC Neighborhoods, a nonprofit focused on protecting affordable homeownership, wasn't surprised by the racial differences.
"It's part of a larger and longer trend that began decades ago," Hassett said.
"Most recently, these communities of color were particularly hard hit because of predatory lending," he said, noting that his organization found that while black households represent 8 percent of New York homeowners, they represented 30 percent of its scam victims; Hispanics own 6 percent homes but make up 20 percent of reported scams.
Also, many communities of color are still reeling from job losses from the financial crisis, Hassett added.
"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. "Prices are rising so far into the clouds and out of reach for people with middle class salaries. We as a city have to work together to keep home ownership affordable. If we don't, there's going to be a continued turnover of homes to investors, which we are already seeing."
