Detroit mortgage rates are climbing, a sign of an improving housing market, nonprofit says
(FOX 2) - There's a lot one can glean from housing data and the latest out of Detroit shows a lot of momentum is underway in the Motor City.
According to the nonprofit Detroit Future City, mortgage rates have climbed dramatically over the past decade. That means a lot to the community, and can help better inform where resources should be diverted - as well as what groups of people still need some help buying a home.
Big picture view:
Thanks to the Home Mortgage Disclosure Act, the DFC was able to analyze housing data from 2012 through 2023. Eleven years ago, banks handed out roughly 200 home loans. Two years ago, 3,600 mortgages were approved.
That activity shows people are returning to the city, DFC Vice President Ashley Williams Clark said. The same data also showed Black homeownership is increasing in Detroit, and even outpacing white homeownership.
And where people are moving, commercial development and infrastructure improvements will follow.
That includes things "like parks, and new water lines, powerlines, and powergrids," said DFC President Anika Goss, "because there is density and investment in those communities where there hadn't been before."
What they're saying:
Clark considers homeownership as a "commitment to living somewhere."
"You're making a commitment to that neighborhood and so when people are choosing to purchase a home with a loan, in many ways that does indicate to us that there is something going on in that neighborhood that's exciting," she said.
Not all Rosy:
There is still work to be done in the Detroit housing market.
According to Goss, the rate of mortgage applications that are denied for Black borrowers is outpacing denials for white borrowers.
There is also differences in why the application is denied. For Black people looking to purchase a home, they are more likely to have a mortgage application denied due to a lack of access to credit and income.
A white person interested in buying a home is more likely to see their mortgage application denied due to a lack of collateral or the value and appraisal of a home.
There are also fewer affordable homes in Detroit. Goss said DFC is also looking for remedies to make it cheaper to get a home.
"That is something that we are looking at. Do we need to put more subsidy in the market? How do we create affordability opportunities for families that should be homeowners but are maybe priced out," she said.