This paper examines mortgage outcomes for a large sample of individual home purchases and refinances linked to credit scores in seven major US markets. Among those with similar credit scores and loan attributes, black and Hispanic homeowners had much higher rates of delinquency and default in the downturn. These estimated differences are especially pronounced for loans originated near the peak of the housing boom. These findings suggest that black and Hispanic homeowners drawn into the market near the peak were especially vulnerable to adverse economic shocks and raise concerns about homeownership as a mechanism for reducing racial disparities in wealth. (JEL D14, J15, R23, R31, R38)
Bayer, Patrick, Fernando Ferreira, and Stephen L. Ross.
"The Vulnerability of Minority Homeowners in the Housing Boom and Bust."
American Economic Journal: Economic Policy,
Household Saving; Personal Finance
Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
Urban, Rural, Regional, Real Estate, and Transportation Economics: Regional Migration; Regional Labor Markets; Population; Neighborhood Characteristics
Housing Supply and Markets
Production Analysis and Firm Location: Government Policy