Mortgage Pricing Differentials Across Hispanic, African-American, and White Households: Evidence From the American Housing Survey

Thomas P. Boehm

Alan Schlottmann

This article reflects the views of the authors and does not necessarily reflect the views of the U.S. Department of Housing and Urban Development.

This article uses recent metropolitan area samples of the American Housing Survey (AHS) for 1998, 2002, and 2004 to investigate differences in the terms, conditions, and use of mortgage financing alternatives. It investigates how financing and mortgage rates differ for Hispanics compared with other ethnic groups across a number of different U.S. housing markets. The principal focus of the article is to examine the extent to which differences in the interest rates obtained by homeowners of different race/ethnicity and income levels can be explained by differences in the characteristics of the borrowers, the property, and the loan itself. For example, Hispanic households appear to have a relatively high burden of first mortgage debt. Although limitations in the information available in the AHS do not allow for the determination of whether discrimination exists for minorities in the sample, this data set does identify important differences in the characteristics of these households, which in turn affect mortgage pricing.