Despite some homeownership increases, report shows mortgage lending inequalities persist

Despite an increase in home buying in Marion County, racial inequalities in homeownership persist.

That’s according to a new report released Wednesday by the Fair Housing Center of Central Indiana.

The report looks at new housing data from 2021 to 2022 and includes home ownership and mortgage lending trends in Indianapolis. It expands on a previous report that looked at data from 2018 through 2020.

The earlier report saw the overall homeownership rate in Indianapolis fall to 54%. In the most recent report, overall homeownership increased to 55%.

Amy Nelson is the Executive Director of the Fair Housing Center of Central Indiana.

“We did see some increases over that time,” she said. “In that time we saw a lot of homebuying occurring.”

However, the rate of increase differed across racial groups. Asian and Hispanic/Latino residents saw fourteen and seven-point increases in Marion County homeownership respectively. Black/African American residents saw just a two-point increase, from 34% to 36%, and White residents saw a one-point increase, from 65% to 66%.

Those county numbers are also lower compared to both state and national averages, with the notable exception of Asian residents whose homeownership rates in Marion County exceeded the state average.

Nelson said that existing racial disparities in bank denials for mortgage applications appear to have persisted.

“Overall what we found was continued inequities and disparities, primarily against people of color, in being able to access mortgages or being able to be approved for mortgages,” she said.

Those disparities were particularly stark for mortgage denial rates. White and Asian applications saw denial rates that were close to half of the denial rates for Black and Hispanic/Latino applicants.

“The problem we have there is being able to get access to the reasons, or the data, on why that’s occurring,” Nelson said. “...That causes some cloudiness as to why those high denial rates are happening here in our community.”

Key data included in the report are the specific lenders across Marion County and how some of their lending practices and denials compare to other banks.

Finally, the report outlines a number of bank closures across Marion County - particularly close to neighborhoods of color.

Nelson said it’s not clear what impact those closures may have.

“This is another trend we’re going to have to watch and figure out,” she said.