Mortgage Interest Rates of Black and White Homeowners

In our project we see that Black families are increasingly moving out of cities and moving to the burbs. Many are chasing the American Dream of homeownership and more space for their children to play and grow. In many towns in the U.S. historical redlining put a significant barrier to this dream for most Black families. Jim Crow era covenant laws, zoning laws and infrastructure development have all played a part in this. While Black families still struggle through the sometimes obscure hangovers of the past there are clear signs. As we parse this question around challenges to homeownership we see the disparities present within mortgage interest rates. What we find is that on average Black families are paying higher interest rates in order to have the same dream as white families. While the percentage of Black families that outright own their homes is less than than that of white families, the disparity is not extreme. However, the ceiling for white families with mortgages is 7% with the majority paying under 4%. Black families pay rates as high as 8% with nearly half of those with mortgages paying over 4%. The picket fence dissipates to white as the hurdles to the dream get higher. We bring back the specter of the red line to imply historical challenges anew.