Racial disparities in the mortgage market have not declined much over the past 30 to 40 years, according to research conducted by Northwestern University faculty.
The study, “Racial Discrimination in the U.S. Housing and Mortgage Lending Markets: A Quantitative Review of Trends, 1976-2016,” found Black 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 Northwestern professor and lead study author Lincoln Quillian. “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.”
However, the study also found that incidents of overt discrimination — such as telling a Black buyer that a home was no longer available when it was still on the market in order to steer that buyer to a different neighborhood — have also declined significantly.