Nav: Home

Racial discrimination in mortgage market persistent over last four decades

January 23, 2020

  • Black and Hispanic borrowers more likely to be rejected when they apply for a loan; more likely to receive a high-cost mortgage
  • Housing discrimination leads to persistent neighborhood segregation
  • Discrimination in mortgage market makes it more difficult for minority households to build wealth through housing
EVANSTON, Ill. --- A new Northwestern University analysis finds that racial disparities in the mortgage market suggest that discrimination in loan denial and cost has not declined much over the previous 30 to 40 years, yet discrimination in the housing market has decreased during the same time period.

Northwestern researchers examined how discrimination in housing and mortgage lending against blacks, Latinos and Asians has changed over the last 40 years by performing a meta-analysis of existing studies since the late 1970s to the present.

"We find declines in most forms of discrimination, especially the more extreme forms like falsely claiming an advertised unit is no longer available," said Lincoln Quillian, lead author of the study and professor of sociology in the Weinberg College of Arts and Sciences at Northwestern. "There is less reduction and considerable persisting discrimination in more subtle differences in treatment between whites and minorities.

"For example, in about 10% audits in which a white and an African-American auditor were sent to apply for the same unit after 2005, the white auditor was recommended more units than the African-American auditor. These trends hold in both the large HUD (Housing and Urban Development)-sponsored housing audits, which others have examined with similar findings to us, and in smaller correspondence studies."

In the mortgage market the researchers found that racial gaps in loan denial have declined only slightly, and racial gaps in mortgage cost have not declined at all, suggesting persistent racial discrimination. Black and Hispanic borrowers are more likely to be rejected when they apply for a loan and are more likely to receive a high-cost mortgage.

"It was distressing to find no evidence of reduced discrimination in the mortgage market over the last 35 years," said Quillian, also a faculty fellow with the University's Institute for Policy Research. "Discrimination in the mortgage market makes it more difficult for minority households to build wealth through housing, contributing to racial wealth gaps. Discrimination in the housing market increases housing insecurity for minority households and contributes to persistent neighborhood segregation. These results help account for why black homeownership has not increased over the last 35 years."

The reduction in the most exclusionary forms of housing discrimination suggests that in most cases discrimination will not block persistent efforts by black or Hispanic households to move into white or affluent neighborhoods.

"We believe that more subtle forms of discrimination will steer households with weaker neighborhood preferences toward own-race neighborhoods, helping to maintain residential segregation," Quillian said.

In sum, the researchers say, the results suggest that anti-discrimination enforcement in the housing and mortgage markets should continue, and efforts should be increased to ensure that all home seekers receive equal treatment regardless of their race or ethnic background.
-end-
"Racial Discrimination in the U.S. Housing and Mortgage Lending Markets: A Quantitative Review of Trends, 1976-2016" was published recently in the journal Race and Social Problems. In addition to Quillian, co-authors include John J. Lee and Brandon Honoré of Northwestern.

Northwestern University

Related Discrimination Articles:

When kids face discrimination, their mothers' health may suffer
A new study is the first to suggest that children's exposure to discrimination can harm their mothers' health.
Racial discrimination in mortgage market persistent over last four decades
A new Northwestern University analysis finds that racial disparities in the mortgage market suggest that discrimination in loan denial and cost has not declined much over the previous 30 to 40 years, yet discrimination in the housing market has decreased during the same time period.
Successful alcohol, drug recovery hampered by discrimination
Even after resolving a problem with alcohol and other drugs, adults in recovery report experiencing both minor or 'micro' forms of discrimination such as personal slights, and major or 'macro' discrimination such as violation of their personal rights.
Sexual minorities continue to face discrimination, despite increasing support
Despite increasing support for the rights of people in the LGBTQ+ community, discrimination remains a critical and ongoing issue for this population, according to researchers.
Fathers may protect their LGB kids from health effects of discrimination
Lesbian, gay, and bisexual individuals who report being discriminated against but who feel close to their fathers have lower levels of C-reactive protein -- a measure of inflammation and cardiovascular risk -- than those without support from their fathers, finds a new study from researchers at NYU College of Global Public Health.
Uncovering the roots of discrimination toward immigrants
Immigrants are often encouraged to assimilate into their new culture as a way of reducing conflict with their host societies, to appear less threatening to the culture and national identity of the host population.
Using artificial intelligence to detect discrimination
A new artificial intelligence (AI) tool for detecting unfair discrimination -- such as on the basis of race or gender -- has been created by researchers at Penn State and Columbia University.
Evidence of hiring discrimination against nonwhite groups in 9 countries examined
A new meta-analysis on hiring discrimination by Northwestern University sociologist Lincoln Quillian and his colleagues finds evidence of pervasive hiring discrimination against all nonwhite groups in all nine countries they examined.
Perceived discrimination associated with well-being in adults with poor vision
This study of nearly 7,700 men and women 50 or older in England looked at how common perceived discrimination was among those with visual impairment and how that was associated with emotional well-being.
Discrimination against older people needs attention, study says
Ever cracked a joke about old people? It might seem funny, but in a world where the population aged 60 or over is growing faster than all younger age groups, ageism is no laughing matter, says a University of Alberta researcher.
More Discrimination News and Discrimination Current Events

Trending Science News

Current Coronavirus (COVID-19) News

Top Science Podcasts

We have hand picked the top science podcasts of 2020.
Now Playing: TED Radio Hour

Climate Mindset
In the past few months, human beings have come together to fight a global threat. This hour, TED speakers explore how our response can be the catalyst to fight another global crisis: climate change. Guests include political strategist Tom Rivett-Carnac, diplomat Christiana Figueres, climate justice activist Xiye Bastida, and writer, illustrator, and artist Oliver Jeffers.
Now Playing: Science for the People

#562 Superbug to Bedside
By now we're all good and scared about antibiotic resistance, one of the many things coming to get us all. But there's good news, sort of. News antibiotics are coming out! How do they get tested? What does that kind of a trial look like and how does it happen? Host Bethany Brookeshire talks with Matt McCarthy, author of "Superbugs: The Race to Stop an Epidemic", about the ins and outs of testing a new antibiotic in the hospital.
Now Playing: Radiolab

Speedy Beet
There are few musical moments more well-worn than the first four notes of Beethoven's Fifth Symphony. But in this short, we find out that Beethoven might have made a last-ditch effort to keep his music from ever feeling familiar, to keep pushing his listeners to a kind of psychological limit. Big thanks to our Brooklyn Philharmonic musicians: Deborah Buck and Suzy Perelman on violin, Arash Amini on cello, and Ah Ling Neu on viola. And check out The First Four Notes, Matthew Guerrieri's book on Beethoven's Fifth. Support Radiolab today at Radiolab.org/donate.