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Low to moderate income families, people of color excluded from mortgage market

The mortgage industry has been in overdrive since the COVID-19 pandemic began in 2020, but low to moderate income families and people of color have not benefited from the plummeting interest rates overall.

The explosion of refinance lending reinforced historical patterns of disinvestment in lower-income and Black, Indigenous and People of Color communities, according to a new report from The National Community Reinvestment Coalition (NCRC).


The benefits of lower interest rates went mostly to non-Hispanic White, Asian Indian and Chinese homeowners. This was particularly pronounced in refinance lending, where the average interest rate fell from 4.89% in 2018 to 3.09% in 2020. Refinancing greatly increases the pace at which families build wealth through their homes.

The NCRC analyzed Home Mortgage Disclosure Act (HMDA) data collected from lenders by the Consumer Financial Protection Bureau (CFPB). The data includes records for 88% of all mortgage applications taken by lenders and offers a snapshot of the race, ethnicity, gender, age and location of those applications.


“HMDA data is critical for the public to understand both the performance of lenders and who benefits from their lending, and the data from 2020 reveals a frustrating continuation of historic racial inequities in access to credit and homeownership,” said Dedrick Asante-Muhammad, NCRC’s chief of membership, policy and equity. “The collection and disclosure of the data provides transparency into the financial system, but it also reveals the continuing failure of our lenders, laws and regulators to close the racial homeownership and wealth divides.”

Since 2018, HMDA data has included detailed information on specific racial and ethnic groups and new insight into how different communities struggle to achieve the American Dream despite decades of advocacy, regulator support, and lender efforts.


“The gap in homeownership between Black and White households has remained almost unchanged for 120 years,” said Jason Richardson, NCRC’s senior director of research and evaluation and one of the authors of the report. “Today that gap remains near an all-time high. This drives a massive gap in wealth between homeowners and renters that grows larger with each passing year.”

NCRC has called for a 60% homeownership rate for communities traditionally excluded from homeownership. They state that policy makers, community leaders, and lenders themselves should rally around bold new approaches, race-specific metrics and performance requirements to bridge the wealth gap and help all American families have the chance to be homeowners and build wealth for themselves and their children.

Click here to view the NCRC’s full report.



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