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Housing & Homelessness

UCLA Research Reveals Significant Racial and Ethnic Disparities in Los Angeles County’s Mortgage Market


A new UCLA study released today finds that racial disparities in homeownership within Los Angeles County continue to persist.

FOR IMMEDIATE RELEASE                                     

June 8, 2023

UCLA Research Reveals Significant Racial and Ethnic Disparities in Los Angeles County’s Mortgage Market

LOS ANGELES – A new UCLA study released today finds that racial disparities in homeownership within Los Angeles County continue to persist. The report, based on an analysis of pre-pandemic data from the Home Mortgage Disclosure Act (HMDA), reveals that despite anti-discrimination laws and regulations, households of color continue to face significant barriers to accessing low-cost mortgage credit, hindering their path to homeownership and exacerbating the racial wealth gap.

“Our research demonstrates the racial and ethnic stratification that persists within the mortgage market in Los Angeles,” said Miguel Miguel, author of the report. “Without addressing these disparities, we cannot effectively reduce the racial and ethnic wealth gap in Los Angeles County, which risks not only the future prosperity of the region but the entire state.”

The report highlights the central role of homeownership in wealth creation in the United States and emphasizes how limited access to this wealth-generating vehicle impacts households of color. Specifically, the analysis exposes the inequitable treatment of people of color in the mortgage market, particularly among Black and Latino applicants in Los Angeles County. Key findings include:

  1. Latino and Black applicants with excellent credit were 7% less likely to be approved for a conventional loan and 11% more likely, to be approved for a high-cost loan or denied a mortgage. These percentages increased as creditworthiness decreased.
  2. Prospective home buyers of color with excellent creditworthiness were just as likely to obtain a high-cost loan as white applicants with poor creditworthiness.
  3. Lenders denied Black and Latino applicants with excellent creditworthiness at twice the rate as white applicants with similar credit histories. Asian applicants experienced similar mortgage acceptance rates as their white counterparts.

These findings underscore the urgent need for policy interventions to address the systemic barriers communities of color face in accessing affordable mortgage credit. The report puts forth the following recommendations to foster a more equitable mortgage market:

  1. Adjust the factors financial institutions use to determine creditworthiness by considering an applicant’s rental history as part of the underwriting process.
  2. Expand and strengthen local homeownership programs to better assist home seekers of color by supporting efforts to improve their creditworthiness or completely reevaluating the role of creditworthiness in down payment assistance programs.
  3. Improve data collection under the Home Mortgage Disclosure Act (HMDA) by expanding the current socioeconomic indicators collected and made available in public datasets.

UCLA Latino Policy and Politics Institute (UCLA LPPI) faculty expert Dr. José Loya, who leads the broader research project this study is a part of, emphasized the need for action to address the disparities revealed in the report saying, “The findings of this report are an important reminder of the work that remains to dismantle the systemic barriers that limit access to opportunity for communities of color. Homeownership is one of many stepping stones on the path to the American dream. To preserve that dream, policymakers and financial institutions must develop solutions that pave the way for a more inclusive and equitable homeownership landscape.”

Dr. Loya’s more extensive research project focuses on topics related to stratification in homeownership, including ethno-racial, gender and Latino disparities in mortgage access. Along with a team of rising first-generation Latino scholars, including Miguel, his research will provide a more nuanced understanding of the COVID-19 pandemic housing market boom and its effect on racial disparities in the housing market.

The study was made possible through a grant from UCLA LPPI to examine racial disparities in the mortgage market and housing price appreciation in LA’s diverse neighborhoods pre- and post-pandemic.



Kacey Bonner


About UCLA Latino Policy and Politics Institute

The UCLA Latino Policy and Politics Institute addresses the most critical domestic policy challenges facing Latinos and other communities of color through research, advocacy, mobilization, and leadership development to expand genuine opportunity for all Americans.