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Black and Latino households got more mortgages than ever in 2020 — but continued to buy houses in only a small number of Mass. communities

The percentage of loans for Black and Latino borrowers in 2020 remained well below their respective share of the overall state population.

The Charles family left Hyde Park and bought a home in Brockton. More Black and Latino residents are leaving the city and settling in a small cluster of communities along the Route 24 corridor south of Boston according to a new report.Craig F. Walker/Globe Staff

More Black and Latino households are buying their first homes in Massachusetts than ever before, though overall they continued to choose only a handful of towns, according to a new report that tracks lending data in the state.

And even while Black and Latino families have picked up their purchasing pace, the percentage of loans for those borrowers in 2020 still remained well below their respective share of the overall state population, according to the report — the first comprehensive look at lending data in the first year of the COVID-19 pandemic.

“Our analysis shows a homeownership market in Massachusetts that, while serving more homebuyers of color than ever before, is still not closing the wide racial homeownership gap in the Commonwealth,” said Carrie Bernstein, research manager and state data center manager at the UMass Donahue Institute, which conducted the analysis in partnership with the Massachusetts Community & Banking Council.

The report was consistent with other recent analyses of the state’s homeownership market, which have found that soaring housing costs across Great Boston have priced many families out of the city, forcing first-time homebuyers to look to buy their dream home in other parts of the state.


That displacement has had a significant impact in Boston’s historically Black communities, as more Black residents are leaving the city and settling in a small cluster of communities along the Route 24 corridor south of Boston, such as Brockton, according to a Globe review in May of statewide lending and census data. Real estate agents point to a range of reasons that first-time homebuyers may choose a certain community: quality of schools, cost of living, the community’s diversity, or business culture. But what is clear is that people buy where they can afford to live.

In Boston, the total number of loans to Black borrowers decreased from 2019 to 2020, from 306 to 256. Most of the loans — 81 percent — were made in just five neighborhoods: Dorchester, Roxbury, Mattapan, Hyde Park, and Jamaica Plain.


The latest report, analyzing 2020 data from across the state, found that 3,900 Black households and 7,155 Latino households bought their first home that year, a record high for both demographic groups. The total number of mortgages granted that year, also peaked at a record high 76,380 home loans.

The data from 2020 represents the most recent year available, and it does not account for for today’s housing market and rising interest rates, which could impact where and when a borrower may be able to apply for a mortgage.

Homeownership can be a significant contributor to wealth building and can help close the state’s racial wealth gap. But even with successes, there is still work to do to bring about greater equity said Thomas Callahan, of the Massachusetts Community and Banking Council.

Of the total number of loans made in 2020, 5.1 percent of them went to Black households, though Black residents comprise 6.5 percent of the state population. Of the total loans, Black residents received only 3.5 percent loans that were not government-backed Federal Housing Administration loans.

Similarly, Hispanic residents make up 12.6 percent of the total state population, though Latino households received only 6.6 percent of loans that were not government backed. Of all loans, Latino households received 9.4 percent.


More than half of all government-backed loans were issued in Gateway Cities, or smaller urban areas where median income levels are lower than the statewide average, including Springfield, Brockton, New Bedford and Lawrence.

Meanwhile, according to the report, loans to households of color in 2020 were concentrated in only a few cities and towns: 38 percent of all loans to Black households were made in Boston, Springfield, Worcester, Brockton, and Taunton. That figure is down from two years ago, when 46 percent of all loans were made in just five communities, though it shows that Black and Latino households are still largely segregated in only a few communities in Massachusetts.

Similarly, nearly a third of all loans to Hispanic households were in just five communities — Boston, Springfield, Worcester, Lawrence, and Lynn.

In 2020 in Massachusetts, lenders did not approve a single mortgage for a Black borrower in 107 of the state’s 351 communities.

Meanwhile, the report found that Black, Asian, and Hispanic households are denied loans at rates higher than similarly situated white borrowers. The report examined denials of mortgage applicants who were, on paper, highly qualified applicants: They had a down payment of 20 percent or more, they had relatively modest overall debt, and they reported earning above the area median income.

The report found that, among mortgage applicants with 20 percent of the down payment or higher, 13 percent of Black applicants were denied; 9 percent of Hispanic borrowers were denied a mortgage; and 6 percent of Asian applicants were denied. By contrast, only 5 percent of white applicants in this pool were denied.


The report did find one positive trend for working-class households at a time of soaring home prices, according to Michelle Meiser, co-chair of the Community and Banking Council’s mortgage lending committee, and a vice president at Cambridge Trust: Mortgages to low- and moderate-income borrowers remained steady, with 32 percent of all home mortgages going to households that make less than 80 percent of the area median income.

“This report underscores the importance of innovative local homeownership programs that help to address the most common barriers facing underserved first-time homebuyers; affordability, down payment, and credit availability,” said Meiser.

Milton J. Valencia can be reached at Follow him @miltonvalencia and on Instagram @miltonvalencia617.