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Our most academic publication offers research and surveys on monetary policy, national and international developments, banking, and more. The content is written for an economically informed readership—from the undergraduate student to the PhD.

Vol. 99, No. 1 (Posted 2017-02-15)

The Homeownership Experience of Minorities During the Great Recession

by Carlos Garriga, Lowell R. Ricketts, and Don Schlagenhauf

This is a condensed version of the original article.


It has been argued that during the Great Recession, wealth losses were more concentrated for college-­educated Black and Hispanic families than for White and Asian college-educated families and their non-college-educated Black and Hispanic peers. This article explores the extent to which the homeownership experience for families who purchased homes between 2004 and 2008 is a potentially impor­tant factor in explaining this finding. During the housing boom, the increase in homeownership for Blacks and Hispanics was very similar, but the second group had a smaller decline. Despite these differences, the Great Recession was far more destructive for these minorities regardless of income. Logit regressions show that underwriting standards and loan structure explain a significant amount of the non-White–White gap in foreclosures. However, geographic concentration was most significant in explaining the gap for Hispanic borrowers. Despite accounting for these factors, sizable gaps in the likelihood of foreclosure remain between Blacks and Hispanics relative to Whites.

Full Article PDF

https://doi.org/10.20955/r.2017.139-67

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