Despite the historically low mortgage and refinance rates made available to homeowners and shoppers during the pandemic, the National Community Reinvestment Coalition that access did not mean equity.
According to the just-released NCRC 2020 Home Mortgage Report: Examining Shifts During COVID-19, analysts found that the gap in homeownership rates between Black and White families remained near a 120-year high point.
In 2020, among applicants who identified their race, non-Hispanic White borrowers received 75 percent of loan originations while falling to just 64% of the adult population.
During 2020, most of the increase in BIPOC home purchase lending was due to expanding numbers of Hispanic and Asian applicants, who increased by 1.5 percent and 1 percent, respectively. Black borrowers decreased by 0.1 percent.
Additionally, originations to majority-minority neighborhoods fell from 19.1 percent of all loans in 2018 to 18.5 percent in 2020.
Elsewhere, the report found that while the average refi interest rates declined from 4.89 percent in 2018 to 3.09 percent in 2020, lending disproportionately flowed to White, Asian Indian and Chinese borrowers. Other BIPOC communities actually saw their share of mortgage lending shrink.
NCRC also calls out an alarming increase in the number of loan records that lacked demographic data on race and ethnicity. The report notes that, thanks to a loophole in reporting requirements, demographic data from purchased loans can be removed in many instances.
The report calls for the Consumer Financial Protection Bureau to engage the public, consumer groups, and lenders to assess best practices for encouraging loan applicants to volunteer demographic data. Specifically, the report urges the Consumer Financial Protection Bureau to require lenders that report loan purchases to publish any demographic data to close the aforementioned loophole.
Additionally, the NCRC calls on Congress, housing regulators and lenders should rally around a 60 percent homeownership goal for African Americans and Latinos by 2040, while also expanding support for first-generation buyers.
To download the full NCRC report, click here.