Racial differences in mortgage denials over the housing cycle: Evidence from U.S. metropolitan areas

Christopher H. Wheeler and Luke M. Olson

Journal of Housing Economics, 2015, vol. 30, issue C, 33-49

Abstract: The cyclical movement of housing prices likely affects the supply of and demand for credit for home purchases, but little is known about how this process might influence differential access to credit between minority and non-minority borrowers. This paper uses data reported through the Home Mortgage Disclosure Act (HMDA) over the period 1990–2013 to estimate the relationship between annual metropolitan area-level house price inflation and the extent to which Black borrowers are denied relative to ‘comparable’ White borrowers on their loan applications. The results indicate that, on average, Black borrowers are denied more frequently than White borrowers, but this difference in denial rates decreases significantly as house prices rise more rapidly. Such results demonstrate the importance of considering local housing market conditions when using HMDA data to assess lender compliance with fair lending laws.

Keywords: Mortgage lending; Fair lending; Discrimination; HMDA (search for similar items in EconPapers)
JEL-codes: G21 G28 J15 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1051137715000455
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:jhouse:v:30:y:2015:i:c:p:33-49

DOI: 10.1016/j.jhe.2015.10.004

Access Statistics for this article

Journal of Housing Economics is currently edited by H. O. Pollakowski

More articles in Journal of Housing Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().