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The Homeownership Experience of Minorities During the Great Recession

Author

Listed:
  • Carlos Garriga
  • Lowell R. Ricketts
  • Don E. Schlagenhauf

Abstract

It has been argued that during the Great Recession, wealth losses were more concentrated for college-educated Black and Hispanic families than for White and Asian college-educated families and their non-college-educated Black and Hispanic peers. This article explores the extent to which the homeownership experience for families who purchased homes between 2004 and 2008 is a potentially important factor in explaining this finding. During the housing boom, the increase in homeownership for Blacks and Hispanics was very similar, but the second group had a smaller decline. Despite these differences, the Great Recession was far more destructive for these minorities regardless of income. Logit regressions show that underwriting standards and loan structure explain a significant amount of the non-White?White gap in foreclosures. However, geographic concentration was most significant in explaining the gap for Hispanic borrowers. Despite accounting for these factors, sizable gaps in the likelihood of foreclosure remain between Blacks and Hispanics relative to Whites.

Suggested Citation

  • Carlos Garriga & Lowell R. Ricketts & Don E. Schlagenhauf, 2017. "The Homeownership Experience of Minorities During the Great Recession," Review, Federal Reserve Bank of St. Louis, vol. 99(1), pages 139-167.
    • Handle: RePEc:fip:fedlrv:00078
    DOI: 10.20955/r.2017.139-67
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    Cited by:

    1. Valentina Duque & Natasha V Pilkauskas & Irwin Garfinkel, 2018. "Assets among low-income families in the Great Recession," PLOS ONE, Public Library of Science, vol. 13(2), pages 1-21, February.
    2. Wong, Francis & Kermani, Amir, 2022. "Racial Disparities in Housing Returns," VfS Annual Conference 2022 (Basel): Big Data in Economics 264099, Verein für Socialpolitik / German Economic Association.
    3. Doron Shiffer-Sebba & Hyunjoon Park, 2021. "US baby boomers’ homeownership trajectories across the life course: A Sequence Analysis approach," Demographic Research, Max Planck Institute for Demographic Research, Rostock, Germany, vol. 44(43), pages 1057-1072.

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    More about this item

    JEL classification:

    • R2 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination

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