Racial Stratification in the Mortgage Market: The Role of Co-Applicants

Jose Loya , University of Pennsylvania

Unequal access to homeownership has long been central to racial stratification. Ample research demonstrates the large racial disparities that exist in access and outcomes within the mortgage process at both the individual and neighborhood levels. However, the underlying assumption in most of these studies is that the couples applying for a mortgage are racially homogenous. As the volume of interracial couples increases in the mortgage market, it is important to incorporate the ethno-racial variation in mortgage outcomes. This paper draws on annual data from the Home Mortgage Disclosure Act (HMDA) from 2010 to 2016 to assess racial disparities in loan outcomes associated with different racial couplings. I show that, racial disparities in loan outcomes vary tremendously when factoring the ethno-racial identity of the co-applicant. In particular, interracial couples that involve a black or Latino partner do worse than mono-racial couples. On the other hand, white and Asian partners tend to do better across mortgage loan outcomes.

See extended abstract

 Presented in Session 166. Race, Wealth, and Debt