Black Homebuyers 1.7 Times More Likely to Be Denied for Mortgages Than All Homebuyers

Written by Alaya Linton +1 more

Edited by Jamie Cattanach

The path to homeownership typically begins with applying for a mortgage — but for many aspiring Black homeowners, the journey ends there. A LendingTree study reveals that Black applicants nationwide are 1.7 times more likely to be denied a mortgage than homebuyers of all races.

High mortgage denial rates — along with limited generational wealth, income disparities and discriminatory practices — are just one of the persistent challenges that keep the Black homeownership rate lower than that of other racial groups.

But these disparities aren’t uniform. Denial rates — and the gaps between Black and overall applicants — vary widely across the country.

Key findings

Black homebuyer denial rate is 19.00% nationally

Black mortgage applicants are 1.7 times more likely to be denied a home loan than all homebuyers. In 2024, the mortgage denial rate for Black Americans was 19.00%, 7.73 percentage points higher than the denial rate for all applicants, 11.27%.

In what is perhaps a sign of progress, the denial rate disparity between Black and all mortgage applicants in the 50 largest metros decreased from 5.30 percentage points in 2022 to 4.80 percentage points in 2024.

Mortgage denial rates across 50 largest metros: All buyers vs. Black buyers

While the difference in denial rates between Black homebuyers and all buyers has narrowed slightly, the homeownership gap remains wide. The national homeownership rate in 2023 was 65.2%, yet it was 44.7% among Black consumers — significantly lower than the rate among white (72.4%), Asian (63.4%) and Hispanic (51.0%) households.

LendingTree chief consumer finance analyst Matt Schulz says a higher denial rate for Black consumers means limited access to the benefits of owning a home.

“For generations, homeownership has been one of the most powerful tools for building wealth that Americans have. Homeownership isn’t cheap, and there are ongoing costs; however, the equity that you can build over the years can be incredibly helpful. Not only can it provide you funding when you’re in a financial pinch, but it can also be used in working toward other financial goals,” Schulz says.

Black homebuyers face biggest discrepancies in Michigan metros

Two Michigan metros — Grand Rapids and Detroit — have the country’s largest gaps in mortgage denial rates between Black homebuyers and all applicants.

In Grand Rapids, the denial rate for Black borrowers is 23.90%, compared with 14.15% among applicants of all races — a 9.75 percentage point difference. Detroit follows closely with an 8.54-point gap, where 21.25% of Black applicants are denied, compared with 12.71% of all applicants.

Several factors may contribute to the higher denial rates in Grand Rapids and Detroit, including the effects of historically discriminatory practices, affordability challenges and disparities in credit access and income levels. In Grand Rapids, the median household income for Black residents in 2023 was only $40,977, compared with the citywide median of $65,526, which limits down payment savings and diminishes affordability.

Detroit has a long history of redlining, with its impacts (and modern forms of redlining) continuing to affect the area’s majority-Black population. Additionally, the city has seen a dramatic increase in home prices, likely pricing many prospective buyers out. A report from Mortgage Calculator shows the average Detroit home price increased 72% from $46,586 in 2020 to $80,127 in 2024.

Raleigh, N.C., has the third-highest gap with an 8.44 percentage point difference. The denial rate in the Southern metro is 16.41% among Black borrowers, compared with 7.97% among all homebuyers.

The mortgage denial rate for Black borrowers in these three metros has increased in recent years.

% change in denial rates for Black borrowers among metros with biggest spreads

Memphis, Tenn., and Atlanta have highest proportion of Black applicants

The proportion of Black mortgage applicants compared to all applicants varies significantly across the country’s largest metros. Memphis, Tenn., has the highest share at 27.92%, followed by Atlanta at 25.35%. The denial gaps in those metros are 4.90 and 4.01 percentage points, respectively, closely reflecting the 50-metro average of 4.80 percentage points.

Conversely, San Jose, Calif., has the smallest percentage of Black applicants (0.71%) and is the only metro where less than 1.00% of all mortgage applicants are Black. The denial rate gap there is 5.64 percentage points. Salt Lake City has the next smallest percentage of Black applicants at 1.50%.

Black homebuyers face smallest discrepancy in Salt Lake City

Salt Lake City boasts the lowest mortgage denial gap of the country’s largest metros. The denial rate for Black applicants in the Utah capital is 8.94%, just 0.24 percentage points above the overall denial rate of 8.70%. While Salt Lake City’s denial rate difference is much lower than the average discrepancy of 4.80, the narrow gap may be a matter of numbers rather than policy.

Black residents make up only 2.7% of the city’s population and 1.50% of 2023 mortgage applications, representing just over 300 applicants and 27 denials. With such a small quantity, a handful of approvals or denials could alter the rate. Even so, the economic disparities are evident in Salt Lake City — the median Black household income in 2023 was $37,821, versus $79,485 for white households.

San Antonio has the second-lowest discrepancy (1.54 percentage points) with a 15.36% mortgage denial rate for Black households, compared with 13.82% for all households. One factor contributing to the narrow difference could be the area’s significant military and veteran population, which can lead to a higher Black homeownership rate. Additionally, the prevalence of VA loans among military borrowers may result in better approval rates, as such loans have more flexible qualification requirements.

Fresno, Calif., has the third-lowest gap with a 2.02 percentage point difference. The denial rate there is 12.27% among Black borrowers and 10.25% among all borrowers.

Between 2022 and 2024, the mortgage denial rate among Black homebuyers decreased in Salt Lake City and Fresno, Calif., while increasing in San Antonio.

% change in denial rates for Black borrowers among metros with smallest spreads

Notably, six of the 10 metros with the smallest denial rate gaps are in just two states — California and Texas, with three metros in each.

Full rankings: Metros with biggest/smallest disparity in mortgage denial rates between Black borrowers and all borrowers

Where Black homebuyer denial rates are highest and lowest

Black homebuyers face the highest rejection rates in Grand Rapids, Detroit and Miami, with denial rates reaching above 20.00%. Grand Rapids, which also has the largest denial discrepancy, has a denial rate of 23.90% among Black borrowers. Detroit (21.25%) and Miami (20.11%) follow.

By contrast, the metros with the lowest Black denial rates have rejection rates roughly half those of the highest metros. Salt Lake City, which also boasts the slimmest denial rate gap, has a rejection rate of 8.94% among Black applicants. Seattle (10.22%) and Portland, Ore. (10.57%), follow.

While denial rates among Black homebuyers vary across the 50 metros, Salt Lake City is the only metro with a denial rate below 10.00%.

Full rankings: Metros with highest/lowest mortgage denial rates among Black homebuyers

Credit history is significant obstacle for Black applicants

Multiple factors can lead to a mortgage denial. However, the most common obstacle tripping up applicants is the debt-to-income (DTI) ratio requirement. This metric compares a borrower’s monthly debt payments to their monthly income, signaling their ability to afford the mortgage. In 2024, failing to meet the required DTI ratio accounted for 34.02% of denials for all applicants and 34.08% among Black borrowers.

Primary mortgage denial reasons

Notably, another obstacle impacts Black mortgage applicants at a much higher rate compared to all applicants and almost as often as DTI requirements: credit history. It’s the second-highest denial reason for both Black borrowers and all mortgage applicants. However, 33.16% of Black borrowers are denied for this reason, compared with 24.85% of all applicants, an 8.31 percentage point difference.

“There’s very little in life that is more expensive than crummy credit,” says Schulz, who is also the author of “Ask Questions, Save Money, Make More: How to Take Control of Your Financial Life.”

“It can cost you tens of thousands of dollars or more over the course of your life in the form of higher interest rates and more fees. It can even keep you from getting a loan altogether.

“Black Americans typically have significantly lower credit scores than other Americans. That gap is a really big deal and means that Black Americans, as a group, are going to have a far harder time getting a mortgage than white or Latino Americans.”

In 2021, the median VantageScore for Black consumers was 639, just slightly higher than the 620 minimum credit score required for nongovernment mortgages. By contrast, the median score for white consumers was almost 100 points higher, at 730. Additionally, Black and Latino consumers are more likely to be credit invisible (having little to no credit history) than those in other racial groups.

Homebuying as a Black American: Top expert tips

As this study highlights, the path to homeownership is often paved with additional hurdles for Black homebuyers. Despite — or because of — these obstacles, Black homebuyers can take proactive steps to navigate the homebuying process successfully.

Methodology

LendingTree analyzed purchase mortgage application records from the Federal Financial Institutions Examination Council’s Home Mortgage Disclosure Act (HMDA) 2024 datasets, retrieved on May 27, 2025.

Denial rates were calculated by dividing the number of denied mortgage applications by the total number of mortgage applications. The following application types were included in our count:

Preapproval requests — approved or otherwise — weren’t included in our applications count.

Researchers used the U.S. Census Bureau 2023 American Community Survey with five-year estimates to identify the 50 largest metros.