Racial and Ethnic Disparities in Mortgage Lending: New Evidence from Expanded HMDA Data

Sean Lewis-Faupel and Nicholas Tenev

Papers from arXiv.org

Abstract: This paper investigates gaps in access to and the cost of housing credit by race and ethnicity using the near universe of U.S. mortgage applications. Our data contain borrower creditworthiness variables that have historically been absent from industry-wide application data and that are likely to affect application approval and loan pricing. We find large unconditional disparities in approval and pricing between racial and ethnic groups. After conditioning on key elements of observable borrower creditworthiness, these disparities are smaller but remain economically meaningful. Sensitivity analysis indicates that omitted factors as predictive of approval/pricing and race/ethnicity as credit score can explain some of the pricing disparities but cannot explain the approval disparities. Taken together, our results suggest that credit score, income, and down payment requirements significantly contribute to disparities in mortgage access and affordability but that other systemic barriers are also responsible for a large share of disparate outcomes in the mortgage market.

Date: 2024-05
New Economics Papers: this item is included in nep-ban and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://arxiv.org/pdf/2405.00895 Latest version (application/pdf)

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:arx:papers:2405.00895

Access Statistics for this paper

More papers in Papers from arXiv.org
Bibliographic data for series maintained by arXiv administrators ().