Racial Disparities in the U.S. Mortgage Market

AEA Papers and Proceedings, 2024

5 Pages Posted: 10 Apr 2024

See all articles by Agustin Hurtado

Agustin Hurtado

University of Maryland - Robert H. Smith School of Business

Jung Sakong

Federal Reserve Bank of Chicago

Date Written: March 10, 2024

Abstract

We study racial disparities in the U.S. 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 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 do not seem to matter much. Our findings represent another step toward understanding the factors driving discriminatory forces in the mortgage market. Recent research suggests structural or organizational factors may also play a role and have been overlooked by previous studies (Hurtado and Sakong, 2024).

Suggested Citation

Hurtado, Agustin and Sakong, Jung, Racial Disparities in the U.S. Mortgage Market (March 10, 2024). AEA Papers and Proceedings, 2024 , Available at SSRN: https://ssrn.com/abstract=4754146 or http://dx.doi.org/10.2139/ssrn.4754146

Agustin Hurtado (Contact Author)

University of Maryland - Robert H. Smith School of Business ( email )

Jung Sakong

Federal Reserve Bank of Chicago ( email )

230 South LaSalle Street
Chicago, IL 60604
United States

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