Skip to main content

Advertisement

SpringerLink
Log in

Racial Discrimination in the U.S. Housing and Mortgage Lending Markets: A Quantitative Review of Trends, 1976–2016

  • Published:
Race and Social Problems Aims and scope Submit manuscript

Abstract

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.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Fig. 1
Fig. 2
Fig. 3
Fig. 4

Similar content being viewed by others

Data Availability

The data and code used in this paper are available online at: http://sites.northwestern.edu/dmap.

Notes

  1. There were 1152 black–white rental tests and 1112 black–white sales tests (Turner et al. 2002, Exhibit 2–3).

  2. We include two studies that were published separately from Galster’s summaries. We were not able to include other audits he summarizes either because the outcomes reported are not comparable to other studies we consider or because critical information like sample sizes are not reported.

  3. A bibliographic list of these studies is included in the Online Appendix.

  4. Another option would be the ratio of white success rates to minority success rates, a number described as the “discrimination ratio” in Quillian et al. (2019). There are two reasons we use the difference measure in this manuscript rather than the discrimination ratio. First, several studies in the housing literature do not differentiate between “neither received a positive response” and “both received a positive response” in reporting results of paired studies, and without this information the ratio measure cannot be calculated. Second, because the rate of positive responses (to both groups) in housing studies tends to be much higher than in employment studies, the ratio runs into upper bound issues when the overall response rate is high. This is less of a problem for difference measures.

  5. Often when correlations are outcomes in meta-analyses they are transformed by taking Fischer’s z-transformation to give them a more symmetric distribution. However, Stanley and Doucouliagos (2012) argue this is only necessary when some of the correlations are large, getting close to − 1 or 1. None of our correlations in absolute value are above .2, and so we perform the meta-analysis using the more interpretable raw correlations.

  6. We do not include steering toward own-race neighborhoods as an outcome because this outcome is available in too few of the discrimination audits outside of the HUD studies.

  7. We also performed standard publication bias tests using the trim- and-fill procedure (see Borenstein et al. 2009, chapter 30). The results showed evidence of publication bias only for a couple of outcomes for Hispanics. The procedure is limited by the small sample of studies.

  8. Scatterplots showing the regression lines are shown in the Online Appendix.

  9. We also performed a standard publication bias test using the trim- and-fill procedure (see Borenstein et al. 2009, chapter 30). The results showed evidence of publication bias for the mortgage cost outcome but not the loan denial outcome. Breaking down the results before and after 2005 did not produce evidence of publication bias in mortgage cost for either sub-period.

  10. The number of studies is sometimes larger for the pooled analysis than the sum of blacks and Hispanics separately because this includes both studies focused on blacks or Hispanics and some studies using a combined black-Hispanic group.

  11. This is due to the small number of studies with credit information and the fact that studies including borrower credit are all concentrated in a short period of time. The studies with borrower credit characteristics that examine loan denial are from 1990 or earlier, while those that examine mortgage cost use data from 2000 to 2008.

References

  • Aloe, A. M. (2014). An empirical investigation of partial effect sizes in meta-analysis of correlational data. The Journal of General Psychology,141(1), 47–64. https://doi.org/10.1080/00221309.2013.853021.

    Article  Google Scholar 

  • Auspurg, K., Schneck, A., & Hinz, T. (2019). Closed doors everywhere? A meta-analysis of field experiments on ethnic discrimination in rental housing markets. Journal of Ethnic and Migration Studies,45(1), 95–114. https://doi.org/10.1080/1369183X.2018.1489223.

    Article  Google Scholar 

  • Bayer, P., Ferreira, F., & Ross, S. L. (2018). What drives racial and ethnic differences in high-cost mortgages? The role of high-risk lenders. The Review of Financial Studies,31(1), 175–205.

    Article  Google Scholar 

  • Black, H., Schweitzer, R. L., & Mandell, L. (1978). Discrimination in mortgage lending. The American Economic Review,68(2), 186–191.

    Google Scholar 

  • Bobo, L., Kluegel, J. R., & Smith, R. A. (1997). Laissez-Faire racism: The crystallization of a kinder, gentler, antiblack ideology. In S. A. Tuch & J. K. Martin (Eds.), Racial attitudes in the 1990s: Continuity and change. Westport, CT: Praeger Publishers.

    Google Scholar 

  • Bocian, D. G., Ernst, K. S., & Li, W. (2008). Race, ethnicity and subprime home loan pricing. Journal of Economics and Business,60(1–2), 110–124.

    Article  Google Scholar 

  • Bonilla-Silva, E. (2009). Racism without racists: Color-blind racism and the persistence of racial inequality in America. Lanham, MD: Rowman & Littlefield Publishers.

    Google Scholar 

  • Borenstein, M., Hedges, L. V., Higgins, J. P. T., & Rothstein, H. R. (2009). Introduction to meta-analysis. West Sussex, UK: John Wiley & Sons.

    Book  Google Scholar 

  • Bostic, R. W., & Surette, B. J. (2001). Have the doors opened wider? Trends in homeownership rates by race and income. The Journal of Real Estate Finance and Economics,23(3), 411–434.

    Article  Google Scholar 

  • Carpusor, A. G., & Loges, W. E. (2006). Rental discrimination and ethnicity in names. Journal of Applied Social Psychology,36(4), 934–952. https://doi.org/10.1111/j.0021-9029.2006.00050.x.

    Article  Google Scholar 

  • Choi, A., Herbert, K. Winslow, O., & Browne, A. (2019). Long Island divided. Newsday (Long Island), November 17, 2019. https://projects.newsday.com/long-island/real-estate-agents-investigation/

  • Cloud, C., & Galster, G. (1993). What do we know about racial discrimination in mortgage markets? The Review of Black Political Economy,22(1), 101–120. https://doi.org/10.1007/BF02689922.

    Article  Google Scholar 

  • Delis, M. D., & Papadopoulos, P. (2018). Mortgage lending discrimination across the U.S.: New methodology and new evidence. Journal of Financial Services Research. https://doi.org/10.1007/s10693-018-0290-0

    Article  Google Scholar 

  • Faber, J. W., & Ellen, I. G. (2016). Race and the housing cycle: Differences in home equity trends among long-term homeowners. Housing Policy Debate,26(3), 456–473. https://doi.org/10.1080/10511482.2015.1128959.

    Article  Google Scholar 

  • Fang, A. H., Guess, A. M., & Humphreys, M. (2018). Can the government deter discrimination? Evidence from a randomized intervention in New York City. The Journal of Politics,81(1), 127–141. https://doi.org/10.1086/700107.

    Article  Google Scholar 

  • Firebaugh, G., & Farrell, C. R. (2016). Still large, but narrowing: The sizable decline in racial neighborhood inequality in metropolitan America, 1980–2010. Demography,53(1), 139–164. https://doi.org/10.1007/s13524-015-0447-5.

    Article  Google Scholar 

  • Flage, A. (2018). Ethnic and gender discrimination in the rental housing market: Evidence from a meta-analysis of correspondence tests, 2006–2017. Journal of Housing Economics,41, 251–273. https://doi.org/10.1016/j.jhe.2018.07.003.

    Article  Google Scholar 

  • Friedman, S., Squires, G. D., & Galvan, C. (2010). Cybersegregation in Boston and Dallas: Is Neil a more desirable tenant than tyrone or jorge?. Washington, DC: Department of Sociology, University at Albany, SUNY and Department of Sociology, George Washington University.

    Google Scholar 

  • Galster, G. (1990a). Racial discrimination in housing markets during the 1980s: A review of the audit evidence. Journal of Planning Education and Research,9(3), 165–175.

    Article  Google Scholar 

  • Galster, G. (1990b). Racial steering in urban housing markets: A review of the audit evidence. The Review of Black Political Economy,18(3), 105–129.

    Article  Google Scholar 

  • Gerber, A. S., & Green, D. P. (2012). Field experiments: Design, analysis, and interpretation (1st ed.). New York: W. W. Norton.

    Google Scholar 

  • Hanson, A., & Hawley, Z. (2011). Do landlords discriminate in the rental housing market? Evidence from an internet field experiment in US cities. Journal of Urban Economics,70(2), 99–114. https://doi.org/10.1016/j.jue.2011.02.003.

    Article  Google Scholar 

  • Hanson, A., Hawley, Z., Martin, H., & Liu, B. (2016). Discrimination in mortgage lending: Evidence from a correspondence experiment. Journal of Urban Economics,92, 48–65. https://doi.org/10.1016/j.jue.2015.12.004.

    Article  Google Scholar 

  • Hanson, A., & Santas, M. (2014). Field experiment tests for discrimination against hispanics in the U.S. rental housing market. Southern Economic Journal,81(1), 135–167. https://doi.org/10.4284/0038-4038-2012.231.

    Article  Google Scholar 

  • Haughwout, A., Mayer, C., & Tracy, J. (2009). Subprime mortgage pricing: the impact of race, ethnicity, and gender on the cost of borrowing. Brookings-Wharton Papers on Urban Affairs, 33–63.

  • Heckman, J. J., & Siegelman, P. (1993). The Urban Institute audit studies: Their methods and finding. In M. Fix & R. J. Struy (Eds.), Clear and convincing evidence: Measurement of discrimination in America (pp. 187–258). Lanham, MD: Urban Institute Press.

    Google Scholar 

  • Hedges, L. V., & Olkin, I. (1980). Vote-counting methods in research synthesis. Psychological Bulletin,88(2), 359–369.

    Article  Google Scholar 

  • Holloway, S. R. (1998). Exploring the neighborhood contingency of race discrimination in mortgage lending in Columbus, Ohio. Annals of the Association of American Geographers,88(2), 252–276. https://doi.org/10.1111/1467-8306.00093.

    Article  Google Scholar 

  • LaCour-Little, M. (1999). Discrimination in mortgage lending: A critical review of the literature. Journal of Real Estate Literature,7(1), 15–49. https://doi.org/10.5555/reli.7.1.v4m86h814810j233.

    Article  Google Scholar 

  • Logan, J. R. (2011). Separate and unequal: The neighborhood gap for blacks, hispanics and Asians in metropolitan America. NYC: Russell Sage Foundation.

    Google Scholar 

  • Logan, J. R. (2013). The persistence of segregation in the 21st century metropolis. City & Community,12(2), 160–168. https://doi.org/10.1111/cico.12021.

    Article  Google Scholar 

  • Massey, D. S., & Lundy, G. (2001). Use of Black English and racial discrimination in urban housing markets: New methods and findings. Urban Affairs Review,36(4), 452–469. https://doi.org/10.1177/10780870122184957.

    Article  Google Scholar 

  • Miller, S. M. (1988). Discrimination in the home-mortgage accept-reject decision: The case of hartford. Housing Finance Review,7, 19–29.

    Google Scholar 

  • National Research Council. (2004). Measuring racial discrimination. Washington, D.C.: The National Academies Press.

    Google Scholar 

  • Oh, S. J., & Yinger, J. (2015). What have we learned from paired testing in housing markets? Cityscape,17(3), 15–59.

    Google Scholar 

  • Quillian, L., Heath, A., Pager, D., Midtbøen, A., Fleischman, F., & Hexel, O. (2019). Do some countries discriminate more than others? Evidence from 97 field experiments of racial discrimination in hiring. Sociological Science,6, 467–496.

    Article  Google Scholar 

  • Quillian, L., Pager, D., Hexel, O., & Midtbøen, A. H. (2017). Meta-analysis of field experiments shows no change in racial discrimination in hiring over time. Proceedings of the National Academy of Sciences,114(41), 10870–10875.

    Article  Google Scholar 

  • Raudenbush, S. (2009). Analyzing effects sizes: Random effects coding. In H. M. Cooper, L. V. Hedges, & J. C. Valentine (Eds.), The handbook of research synthesis and meta-analysis. New York, NY: Russell Sage Foundation.

    Google Scholar 

  • Ross, S. L. (2017). Measuring trends in discrimination with field experiment data. Proceedings of the National Academy of Sciences,114(41), 10815. https://doi.org/10.1073/pnas.1715243114.

    Article  Google Scholar 

  • Ross, S. L., Turner, M. A., Godfrey, E., & Smith, R. R. (2008). Mortgage lending in Chicago and Los Angeles: A paired testing study of the pre-application process. Journal of Urban Economics,63(3), 902–919. https://doi.org/10.1016/j.jue.2007.07.006.

    Article  Google Scholar 

  • Ross, S. L., & Yinger, J. (2002). The color of credit: Mortgage discrimination, research methodology, and fair-lending enforcement. Cambridge, MA: MIT Press.

    Book  Google Scholar 

  • Rugh, J. S., Albright, L., & Massey, D. S. (2015). Race, space, and cumulative disadvantage: A case study of the subprime lending collapse. Social Problems,62(2), 186–218. https://doi.org/10.1093/socpro/spv002.

    Article  Google Scholar 

  • Schuman, H., Steeh, C., Bobo, L. D., & Krysan, M. (1997). Racial attitudes in America: Trends and interpretations. Cambridge, MA: Harvard University Press.

    Google Scholar 

  • Sears, D. O. (1988). Symbolic racism. In P. A. Katz & D. A. Taylor (Eds.), Eliminating racism. Boston: Springer.

    Google Scholar 

  • Sharkey, P. (2014). Spatial segmentation and the black middle class. American Journal of Sociology,119(4), 903–954. https://doi.org/10.1086/674561.

    Article  Google Scholar 

  • Stanley, T. D., & Doucouliagos, H. (2012). Meta-regression analysis in economics and business (1st ed.). London: Routledge.

    Book  Google Scholar 

  • Tootell, G. M. B. (1996). Redlining in Boston: Do mortgage lenders discriminate against neighborhoods? The Quarterly Journal of Economics,111(4), 1049–1079. https://doi.org/10.2307/2946707.

    Article  Google Scholar 

  • Turner, M., & Ross, S. (2003a). Discrimination in metropolitan housing markets: Phase 2—Asians and Pacific Islanders. Washington, D.C.: U.S. Department of Housing and Urban Development.

    Google Scholar 

  • Turner, M., & Ross, S. (2003b). Discrimination in metropolitan housing markets: Phase 3—Native Americans. Washington, D.C.: U.S. Department of Housing and Urban Development.

    Google Scholar 

  • Turner, M., Ross, S., Galster, G., & Yinger, J. (2002). Discrimination in metropolitan housing markets: Phase 1. Washington, D.C.: U.S. Department of Housing and Urban Development.

    Google Scholar 

  • Turner, M. A., Santos, R., Levy, D. K., Wissoker, D., Aranda, C., & Pitingolo, R. (2013). Housing discrimination against racial and ethnic minorities 2012. Washington, D.C.: Urban Institute.

    Google Scholar 

  • Turner, M., Struyk, R., & Yinger, J. (1991). Housing discrimination study synthesis. Washington, DC: U.S. Department of Housing and Urban Development.

    Google Scholar 

  • Vigdor, J. L. (2013). Weighing and measuring the decline in residential segregation. City & Community,12(2), 169–177. https://doi.org/10.1111/cico.12023.

    Article  Google Scholar 

  • Wienk, R. E., Reid, C. E., Simonson, J. C., & Eggers, F. J. (1979). Measuring discrimination in American Housing Markets: The housing market practices survey. Washington, D.C.: U.S. Department of Housing and Urban Development.

    Google Scholar 

Download references

Author information

Authors and Affiliations

  1. Department of Sociology, Northwestern University, Evanston, IL, 60208, USA

    Lincoln Quillian, John J. Lee & Brandon Honoré

Authors
  1. Lincoln Quillian
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. John J. Lee
    View author publications

    You can also search for this author in PubMed Google Scholar

  3. Brandon Honoré
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Lincoln Quillian.

Additional information

Publisher's Note

Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.

Electronic Supplementary Material

Below is the link to the electronic supplementary material.

Supplementary material 1 (DOCX 112 kb)

Rights and permissions

Reprints and permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

Quillian, L., Lee, J.J. & Honoré, B. Racial Discrimination in the U.S. Housing and Mortgage Lending Markets: A Quantitative Review of Trends, 1976–2016. Race Soc Probl 12, 13–28 (2020). https://doi.org/10.1007/s12552-019-09276-x

Download citation

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s12552-019-09276-x

Keywords

Search

Navigation