Title:

Redlining and U.S. Residential Mortgage Market Pricing, 24-21

PREVIOUS | NEXT

Redlining and U.S. Residential Mortgage Market Pricing, 24-21

DATE: July 2024

PART OF: AUTHORS:

ABSTRACT:

Does redlining have implications for mortgage pricing today? This article summarizes our research assessing long-lasting implications from the "residential security maps" developed by the Home Owners Loan Corp. in the 1930s that color/letter-coded U.S. neighborhoods. The study finds (1) that the average levels of mortgage rates and fees are modestly higher for all borrowers on the historically targeted (redlined, that is, C-coded or D-coded) side of a neighborhood color boundary; (2) that mortgage rates and fees are modestly higher for minorities on either side of the boundary; (3) that these higher rates and fees that minorities pay are even higher on the historically C-coded or D-coded side of the boundary; and (4) that the rejection rates for borrowers in targeted areas is larger. The pricing results are economically larger and more statistically significant for more segregated cities, for riskier borrowers and for mortgages issued by the shadow banking system.

Download (pdf) View Full Text

Share this page:


Diversity is critical to the Federal Reserve, and we are firmly committed to fostering a diverse and inclusive culture throughout the Federal Reserve System. Collections within FRASER contain historical language, content, and descriptions that reflect the time period within which they were created and the views of their creators. Certain collections contain objectionable content—for example, discriminatory or biased language used to refer to racial, ethnic, and cultural groups. These viewpoints and attitudes are inconsistent with our values, but the original descriptions are retained to ensure that they are not erased from the historical record.
Save & Share
less

Federal Reserve Bank of Richmond. "Redlining and U.S. Residential Mortgage Market Pricing, 24-21" in Economic Brief (July 2024). https://fraser.stlouisfed.org/title/6034/item/670144, accessed on January 24, 2025.

More Information
less

THEMES:

Metadata (XML)
Metadata (JSON)