Redlining and U.S. Residential Mortgage Market Pricing

Andrew Ellul, David Marques-Ibanez, Horacio Sapriza, Alex Sclip () and Jack Taylor
Additional contact information
Alex Sclip: https://www.dima.univr.it/?ent=persona&id=71738&lang=en
Jack Taylor: https://www.richmondfed.org/research/people/taylor

Richmond Fed Economic Brief, 2024, vol. 24, issue 21

Abstract: Does redlining have implications for mortgage pricing today? This article summarizes our research assessing long-lasting implications from the "residential security maps" developed by the Home Owners Loan Corp. in the 1930s that color/letter-coded U.S. neighborhoods. The study finds (1) that the average levels of mortgage rates and fees are modestly higher for all borrowers on the historically targeted (redlined, that is, C-coded or D-coded) side of a neighborhood color boundary; (2) that mortgage rates and fees are modestly higher for minorities on either side of the boundary; (3) that these higher rates and fees that minorities pay are even higher on the historically C-coded or D-coded side of the boundary; and (4) that the rejection rates for borrowers in targeted areas is larger. The pricing results are economically larger and more statistically significant for more segregated cities, for riskier borrowers and for mortgages issued by the shadow banking system.

Keywords: redlining; mortgages; lending (search for similar items in EconPapers)
Date: 2024
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.richmondfed.org/publications/research/economic_brief/2024/eb_24-21 Briefing (text/html)

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:fip:fedreb:98469

Ordering information: This journal article can be ordered from

Access Statistics for this article

More articles in Richmond Fed Economic Brief from Federal Reserve Bank of Richmond Contact information at EDIRC.
Bibliographic data for series maintained by Christian Pascasio ().