NEW YORK (1010 WINS/WCBS 880) – A clear racial gap in homeownership rates across all regions of New York was noted in a new report published on Tuesday by New York Attorney General Letitia James.
The report found that white households have nearly double the homeownership rate compared to households of color.
The problem is acute in New York City and Long Island, where homes are more expensive, often requiring larger down payments. The difference between who uses Federal Housing Administration (FHA) loans based on race is the widest, according to the report.
“Unfortunately, unequal access to affordable credit is still pervasive across our state, reinforcing the legacy of segregation, leading to a disparity in homeownership, and fueling the racial wealth gap,”
Neighborhoods with mostly people of color still don't have enough resources and aren't valued as highly, the report found.
The average price of homes purchased by people of color in New York City was $824,000 in 2021. In areas where mostly white people lived the average price was $1.23 million.
Albany, New York's capital city, ranks second for the largest disparity in homeownership rates between white and Black residents, with Minneapolis holding the top spot.
The report also found that White families are 25% more likely to own their homes than Asian families, and twice as likely when compared to Black or Latino families.
James explains that the report reveals the significant obstacles faced by borrowers of color in their pursuit of homeownership.
Black and Latino New Yorkers are disproportionately underrepresented among mortgage applicants, and when they do apply, they are denied mortgages at higher rates than white applicants, the report stated.
This is also true regardless of factors such as credit score, income, and loan size.
Even high-credit-score non-white applicants face nearly double the mortgage denial rates of their white counterparts.
Non-white homebuyers encounter higher costs and are more frequently charged higher interest rates on their loans.
They also resort to costlier Federal Housing Administration loans and are less likely to be approved for loan refinancing to a lower rate. Over the life of their loans, these added costs accumulate to over $200 million in additional interest and fees for Black and Latino borrowers.
“This report makes it clear that our state must do more to provide better resources for homebuyers and strengthen housing laws to help empower more New Yorkers,” James said.