”Survey says” looks at various rankings and scorecards judging geographic locations while noting that these grades are best seen as a mix of art and data.

Buzz: In a nod to Martin Luther King Day, let’s acknowledge that a Black household in California is 43% less likely than a White family to live in a home they own and rejected for a mortgage at a 48% faster rate.

Sources: Ownership data from 2019 U.S. Census Bureau and Zillow’s analysis of federal loan rejection data from the Home Mortgage Disclosure Act from 2020.

Details

In California, 36.2% of Black residents own their homes. That’s the 28th best rate among all the states.

South Carolina was the top state for Black homeownership at 52.5%, followed by Maryland at 51.7% and Mississippi at 51%. The worst state was North Dakota at 5.2%, Wyoming at 17.5% and Montana at 19.7%.

Now, compare that with California’s White homeownership at 63.1%, which is well-above the Black rate but still third-lowest in the nation. Top homeownership rates in the U.S. for White households were found in D.C. at 80.5%, South Carolina at 78.7% and Mississippi at 78.2%. Worst? Delaware at 49.6% and Hawaii at 58.9%.

So, when you look at the gap between the two yardsticks, we see that a Black California resident is 43% less like to own. In the U.S., 34 states fared worse on this scale.

Where did we see the widest ownership gap? North Dakota was No. 1 at 92%, followed by Wyoming at 76% and Montana at 72%. The smallest gap was in Delaware at 31%, Maryland at 32% and South Carolina at 33%.

Numerous economic factors contribute to these differences in homeownership and mortgage-rejection rates.

Blacks mortgage applicants in California were rejected 14.9% of the time, the 34th highest denial rate among the states. No. 1 was Mississippi at 31%, followed by Louisiana at 26.1% and Arkansas at 26%. The lowest rejection rates were in Hawaii at 10.5%, Maine at 10.6% and Wyoming at 11.5%.

California’s denial rate for White applicants was 10.1%, the 29th highest nationally. The highest denial rate was found in West Virginia at 14.8%, then New York at 14.5% and Florida at 14.3%. Lowest? North Dakota at 7.1%, South Dakota at 7.2% and Nebraska at 7.5%.

Those rates translate to a Black applicant in California being 48% more likely to be rejected, the 40th biggest gap. Where did we find the largest difference? D.C. at 170%, Wisconsin at 150% and South Carolina at 126%.

At the other end of the loan-approval spectrum, Hawaii was the lone state where Blacks were more likely — by 10% — to be approved for a loan than Whites. Next in the rankings came Maine, where Blacks were 1% more likely to be rejected. Wyoming was No. 3 with a 17% rejection disparity.

Caveat

Over the years, I’ve heard all sorts of arguments that today’s real estate market is “color blind” and that these kinds of stats are misleading.

So noted, but these gaps, at a minimum, reflect a huge economic gulf between Black and White households. That inequality alone is problematic.

Bottom Line

Does the ownership game see only one color — green?

You definitely need plenty of cash and a good job to be a successful buyer. But think about other barriers such as a mortgage-making system that is based heavily on credit scores.

These credit histories typically ignore rent or utility payments — big expenses that are more likely shouldered by minorities. So their score and ability to buy suffer.

Or ponder pandemic era relief given to housing. Owners — 73% of Whites in the U.S. vs. 42% of Blacks — were well-rewarded by a government bailout of the homeownership industry.

When the coronavirus chilled the economy, fears of a real estate meltdown motivated federal action such as propping up lenders, pushing down mortgage rates and generous aid for the owners who couldn’t make their house payments. That fueled a surprising homebuying boom, creating record-setting gains in home prices.

Jonathan Lansner is the business columnist for the Southern California News Group. He can be reached at jlansner@scng.com