Applying for a home mortgage isn’t easy in the Big Apple, where average properties start at six figures, but a report released Friday shows it’s even harder for blacks and Hispanics.
Real estate listings site StreetEasy found that although the two ethnic groups make up roughly half of New York’s population, they only account for roughly 11% of conventional loan applications.
Alan Lightfeldt, a data scientist at StreetEasy, said the issue has more to do with income disparities. “The fact that on a whole real estate and homes are more expensive than any other place in the country makes it a challenge to crack and enter for any racial group,” he said.
The report was based on 2013 data from the Home Mortgage Disclosure Act.
Lightfeldt said New York tends to be more of a renter town and New Yorkers in general are struggling to purchase property.
The latest Douglas Elliman real estate report has the median sales prices for Manhattan, Brooklyn and Queens as $970,000, $610,000 and $446,000 respectively.
The mortgage application rate for blacks and Latinos nationwide is 14.2%, the report said.
The Bronx had the highest percentage of black and Latino mortgage applications with 45.3% and Manhattan had the lowest with 4.1%. Although all ethnic groups in the city had higher mortgage application denial rates than their American counterparts, New York black and Latinos led with a 33.6% and 29.2% denial rate, according to the report.
Ken Inadomi, the executive director of New York Mortgage Coalition, a nonprofit that helps New Yorkers prepare for home ownership, said the majority of his clients are people of color and many lack the experience to navigate the home-buying process.
“A lot of these families are first-time homeowners and there is no legacy to fall back on for knowledge,” he said.
Inadomi added that many home buyers aren’t aware of state and federal programs that can help them get the money for a home. “It’s that liquid cash that prevents people from even trying, but there are options,” he said.
Lightfeldt said elected officials need to focus on the low mortgage application rates so the city can catch up to the rest of the nation’s housing rebound.
“This is an important conversation that city leaders should be having,” he said.