New York Homeowners of Color Hit with $200M in Additional Costs
New York Attorney General Letitia James has issued a compelling call to state legislators, urging them to confront and rectify unjust credit and lending practices that perpetuate a disturbing racial gap in homeownership. These discriminatory practices have resulted in New Yorkers of color shouldering an additional financial burden amounting to hundreds of millions of dollars in extra interest and fees compared to white homeowners.
Released on Tuesday, a comprehensive report from James’s office delivers unsettling insights into the state’s homeownership landscape. According to the study, white residents in New York have over twice the likelihood of owning their homes compared to Black and Latino citizens and are 25% more likely to own homes than Asian New Yorkers. The data reveals a harsh reality: Homeowners of color are saddled with disproportionately high-interest rates and fees, collectively amounting to an astonishing $207 million more than what white homeowners are charged.
Attorney General James emphasized that these exorbitant interest rates create a formidable barrier for people of color seeking to buy homes and spotlight the systemic issues that make credit and loans less accessible for Black, Latino, and Asian communities. “The issue of unequal access to affordable credit continues to be a widespread problem in our state, perpetuating historical patterns of segregation. This, in turn, exacerbates the racial disparity in homeownership and further fuels the racial wealth gap,” stated James, accompanying the report’s release.
The study involved a thorough review of mortgage application and loan data spanning from 2018 to 2021, across New York state. The findings were alarming: Black, Latino, and Asian applicants encountered significantly higher rates of mortgage denial compared to white applicants—even when variables such as credit score, income, loan size, and other financial criteria were accounted for. In the diverse backdrop of New York City alone, white applicants had a 33% higher chance of mortgage approval than applicants of color with similar financial backgrounds.
The report also uncovered another layer of financial inequality. During the period under review, Black, Latino, and Asian homeowners were substantially more likely to have their refinancing applications turned down. This effectively shut them out from benefiting from the historically low interest rates that prevailed throughout the COVID-19 pandemic.
The data presented in this groundbreaking report sets the stage for crucial conversations and actions aimed at dismantling systemic racial disparities in homeownership. It serves as an urgent call to action for legislators, policymakers, and community leaders to take tangible steps toward creating a more equitable housing market in New York.
