Borrowers from a Different Shore: Asian Mortgage Market Outcomes
38 Pages Posted: 21 Oct 2013
Date Written: October 17, 2013
Even though Asians are the largest minority group participating in United States mortgage markets, research on differences in underwriting and pricing outcomes in mortgages typically focuses on the outcomes of African American/Black or Latino/Hispanic borrowers. One explanation for this lack of attention on Asian outcomes follows from the relative economic prosperity of this minority group, which may lead to the belief that they are not in need of consumer protection. While simple group averages support this belief, many researchers claim that the heterogeneity of Asian experiences dictates the use of other measures to account for the varied outcomes of Asian Americans. Using public and private sources of lender data, we examine these issues in U.S. mortgage markets. We find that Asians face challenges in mortgage markets in ways that may be unique as compared to other minority groups. While an examination of unadjusted average denial rates indicates favorable outcomes for Asians compared to other minority groups, we find that after accounting for loan and borrower characteristics, Asians have the highest denial rates among minority groups.
Keywords: Mortgages, Asians, Minority Borrowers, Discrimination
JEL Classification: D12, G21
Suggested Citation: Suggested Citation