Morning Briefing: Inequality in mortgage approvals is slowly improving says Zillow

by Steve Randall04 Nov 2016
Inequality in mortgage approvals is slowly improving says Zillow
Black and Hispanic applicants are twice as likely to be denied a conventional mortgage than those from white or Asian backgrounds.

That’s the finding of analysis by Zillow which looked at new data from the Home Mortgage Disclosure Act.

It found that 22.4 per cent of black applicants and 17.3 per cent of Hispanic applicants were denied conventional loans in 2015, compared to 10.4 per cent of all loan applicants.

The figures have improved; in 2010, 30.5 per cent of black and 25 per cent of Hispanics applicants were denied. Those figures compared to 14.2 per cent of all applicants.

"Even though conditions have improved over the past few years, getting approved for a mortgage is still a significant barrier for some would-be buyers," said Zillow Chief Economist Dr. Svenja Gudell.

Zillow data shows that the homeownership gap between white and black households is broadly the same as it was 100 years ago.
This housing sector is showing solid growth
Housing for the 55+ market is continuing to perform well according to the National Association of Home Builders.

Its market index for the sector shows that for single-family homes, sentiment in present sales and traffic of prospective buyers increased although the expectation for sales over the next 6 months declined. For condos it was a similar story although traffic of prospective buyers was flat.

“The 55+ housing market continues on a steady path toward recovery, much like the overall housing market,” said NAHB Chief Economist Robert Dietz. “Older home owners are able to take advantage of low mortgage rates and rising home prices, enabling them to sell their current homes and buy or rent a home in a 55+ community.”
Refinances made up a fifth of millennials’ closed loans
Data from Ellie Mae shows that a fifth of closed loans for millennials in September were for refinancing, up 3 percentage points from August.

“We’re seeing a slight uptick in the number of refinances in September, indicating maturity among those millennials who previously purchased a home and are looking for an opportunity to lower the cost on their existing mortgage,” said Joe Tyrrell, executive vice president of corporate strategy at Ellie Mae.

Conventional loans made up 64 per cent of the loans while FHA’s were down to 33 per cent. Millennial borrowers’ FICO scores increased to an average 726.

“As the average rate on home loans continues to decline, we are seeing millennials with more purchase power, indicated by the average loan amount increase,” said Tyrrell.


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