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Despite improving public sentiment towards same-sex couples, research suggests that they still face discrimination in various markets. We empirically estimate disparities between same-sex and different-sex couples in the home mortgage market, an understudied, yet important, market. Home ownership rate in the US was approximately 65% in 2021. The majority (approximately 62%) of these home purchases were made using a mortgage. Disparities in home mortgage lending, some of which are discriminatory, could therefore be an important barrier for home ownership for same-sex couples, and the benefits it entails. To estimate these disparities, we use restricted administrative data that encompasses the universe of home mortgage applications in the US from 2018 and 2021. We identify same-sex and different-sex couples according to the gender of the mortgage applicant and co-applicant. Then, controlling for a broad set of lender, borrower, and loan characteristics we find that same-sex couples are 5 percent more likely to be denied a home mortgage than similar different-sex couples and conditional on being approved, are quoted a rate that is 2 percent higher. We find that these disparities are smaller in states with higher approval of same-sex marriage, are smaller the larger the lender, and are larger during crisis (COVID). Additionally, we find that using public home mortgage data, which does not include borrower credit scores for example, overstates these disparities significantly. Our findings stress the importance of further research that would enable reducing disparities between same-sex and different-sex couples in this important market.
Presenter(s)
Nir Eilam, University of North Carolina, Greensboro
Non-Presenting Authors
Yeonjoon Lee, Federal Reserve Bank of Richmond
Disparities between Same-Sex and Different-Sex Couples in the Home Mortgage Market
Category
Volunteer Session Abstract Submission
Description
Session: [037] MORTAGES AND EXPECTATIONS
Date: 7/2/2023
Time: 2:30 PM to 4:15 PM
Date: 7/2/2023
Time: 2:30 PM to 4:15 PM