Home Madison Madison Ahead of National Average in Mortgage Disparities

Madison Ahead of National Average in Mortgage Disparities


White mortgage applicants in the Madison are are more likely to be approved for mortgages than Black applicants, but the disparity here is far less pronounced than the national average, a new study has found.

Researcher Eylul Turkin, a PhD candidate at the University of Washington, examined federal real estate data from 2016. Clever Real Estate published her findings.

The bottom line: nationwide, 74 percent of Black applicants were approved for mortgages in 2016; in contrast, 90 percent of White applicants were approved.

Even when controlling for income, Black applicants were twice as likely to be denied, the study found.

Further, the study found that the vast majority of mortgage applicants were white. While Black people make up about 12 percent of the US population, fewer than five percent of mortgage applicants were Black nationwide.

In Madison, however, 82 percent of Black applicants were approved compared to 92 percent of white applicants in Madison. In other words, there’s still significant disparity between White and Black mortgage applicants, but Black applicants here are more likely to be approved than most other places in the nation.

A local expert says there are a few factors that likely contribute to that.

Jeff Mack of Park Bank

The local economy is strong and unemployment remains very low in Dane County, says Park Bank First Vice President of Business Development Jeff Mack. Not only that, but Madison has the kind of jobs that promote long-term investment, Mack says.

“It’s an academic city.We probably have a number of faculty and faculty members who are black and that do have homes and are purchasing homes in the Madison area,” Mack says. “The type of jobs here in this economy are strong and are very pro-home-ownership. They’re not like these one-off jobs, contracting jobs or something like that. There’s more real stable long term job growth here in Madison.”

There’s also a robust financial sector in Madison, Mack says, which provides a wider range of choices for a wider range of potential borrowers.

“There is a vast group of banks, of lending institutions that are out there to help. And when you have a lot of them that does bring competition,” Mack says. “There’s more options here to get access to purchasing (a home). So you have the credit unions, you have the banks, you have brokers, you have your wealth management areas that are providing loans in some capacities.”

Mack says this kind of study is worthwhile to dig into, and mortgage disparities are worth tackling, because homeownership is “your first step into generational wealth and wealth creation in my eyes. It’s an asset that you can actually pass onto your kids.”

Plus, there’s value in the feeling of stability that can help kids succeed in school and life, Mack says.

I guess it would be the idea of just like the feeling of owning your own property,” he says. “There is that home ownership feeling, where a child knows that that’s their house, they won’t ever get kicked out. That they have complete ownership.”

Mack says he’s always happy to help people of color realize the dream of homeownership.

“Being black it’s always on your mind,” he says. “When you know of disparities like that, when you know of the history of real estate in America and redlining and the kinds of systemic discrimination within the economy and jobs, when you have an opportunity to assist a black family, a black individual with an opportunity such as real estate, to me, I think it’s always a huge win and something that I want to contribute to.”