A new Northwestern University analysis finds that racial disparities in the mortgage market suggest that discrimination in loan denial and cost has not declined much over the previous 30 to 40 years, yet discrimination in the housing market has decreased during the same time period.
Northwestern researchers examined how discrimination in housing and mortgage lendingagainst blacks, Latinos and Asians has changed over the last 40 years by performing a meta-analysis of existing studies since the late 1970s to the present.
"We find declines in most forms of discrimination, especially the more extreme forms like falsely claiming an advertised unit is no longer available," said Lincoln Quillian, lead author of the study and professor of sociology in the Weinberg College of Arts and Sciences at Northwestern. "There is less reduction and considerable persisting discrimination in more subtle differences in treatment between whites and minorities.
Lincoln Quillian et al, Racial Discrimination in the U.S. Housing and Mortgage Lending Markets: A Quantitative Review of Trends, 1976–2016, Race and Social Problems (2020).
We examine trends in racial and ethnic discrimination in U.S. housing and mortgage lending markets through a quantitative review of studies. We code and analyze as a time series results from 16 field experiments of housing discrimination and 19 observational studies of mortgage lending discrimination. Consistent with prior research, we find evidence of a decline in housing discrimination from the late 1970s to the present. Our results show that this trend holds in both the national audits sponsored by the U.S. Department of Housing and Urban Development (HUD) and in non-HUD studies. The decline in discrimination is strongest for discrimination that involves direct denial of housing availability, for which discrimination has declined to low levels. The downward trend in discrimination is weaker for measures reflecting the number of units recommended and inspected, and significant discrimination remains for these outcomes. In the mortgage market, we find that racial gaps in loan denial have declined only slightly, and racial gaps in mortgage cost have not declined at all, suggesting persistent racial discrimination. We discuss the implications of these trends for housing inequality, racial segregation, and racial disparities in household wealth.
Keywords: Discrimination, Housing, Mortgage, Race Trends