Nearly 50 years after the federal Fair Housing Act was signed into law, banning racial discrimination in lending, black prospective homebuyers in the St. Louis area continue to be denied conventional mortgage loans at a much higher rate than whites — even when controlling for income, loan amount and neighborhood.
In the metropolitan area, African-Americans who apply for conventional mortgage loans are 2.5 times more likely to be denied than non-Hispanic whites. That’s according to two years of Home Mortgage Disclosure Act data analyzed by Reveal from The Center for Investigative Reporting, a nonprofit news organization based in California. The act requires thousands of financial institutions to provide mortgage records to the public.
The racial discrimination analysis does not include credit scores or debt-to-income ratios of applicants.
The Reveal report, which identifies 61 areas across the U.S. where lending discrimination still occurs, controls for nine other economic and social factors, including applicants’ income, desired loan amount and the neighborhood where they wanted to buy property.
But no regression analysis is needed to see the historically persistent housing problem in St. Louis. The number of loan applications in specific neighborhoods alone tell the story.
Read more: St. Louis Post-Dispatch