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Racial Disparities in the US Mortgage Market

Author

Listed:
  • Agustin Hurtado
  • Jung Sakong

Abstract

We study racial disparities in the US mortgage market. Using new data from Hurtado and Sakong (2024), we present three findings. First, we document access disparities between minority and otherwise-identical White borrowers even within the same bank and with the same loan officer. In contrast, cost disparities are nearly zero. Second, the use of automated underwriting algorithms is associated with smaller access disparities but slightly larger cost disparities. Third, individual factors such as loan officers' race and whether borrowers' race is observed at application do not seem to matter much.

Suggested Citation

  • Agustin Hurtado & Jung Sakong, 2024. "Racial Disparities in the US Mortgage Market," AEA Papers and Proceedings, American Economic Association, vol. 114, pages 201-204, May.
    • Handle: RePEc:aea:apandp:v:114:y:2024:p:201-04
    DOI: 10.1257/pandp.20241128
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    More about this item

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets

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