Impacts of Redlining Live On in Home Price Disparity

According to a new study by the National Bureau of Economic Research, historical biases lead to minority homebuyers paying an average of 3.5 percent more for their homes than whites, reports Matt Bevilacqua.

1 minute read

April 25, 2013, 8:00 AM PDT

By Jonathan Nettler @nettsj


Although the practice of overt housing discrimination based on race and religion was outlawed long ago, its effects live on in segregated neighborhoods and significantly lower homeownership rates among minorities. "Now, researchers have found another economic barrier to minorities who want to buy a house: Blacks and Latinos pay an average of 3.5 percent more for homes than whites, according to a National Bureau of Economic Research report that was re-released this month."

"According to the report, a minority family’s income, wealth and access to credit had little to do with the higher prices they paid for homes. And outright racism on the part of sellers didn’t play the obvious role that one might think."

"Instead, the racial disadvantage in homebuying appears seeded in historical biases," says Bevilacqua. "The heretofore low homeownership rates among blacks and Latinos could be having a lingering effect, leading to a catch-22 that prevents first-time homeowners from landing a fair price, even when purchasing from people of the same race."

Wednesday, April 24, 2013 in Next City

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