University Study Examines Why Blacks Pay More for Housing Than Whites

houseA study led by researchers at Duke University in Durham, North Carolina, finds that when all other factors are the same, Black Americans still pay more for their housing than their White counterparts. The study of more than 2 million home sales from 1990 to 2008 in four major metropolitan areas studied prices paid by Blacks and Whites for comparable homes in the same neighborhoods. The data showed that Blacks, on average, paid 3.5 percent more. The results were consistent for buyers of the same income, wealth, and credit rating. The racial gap was largest in the Chicago metropolitan market. Los Angeles and San Francisco had the smallest racial gap.

Pat Bayer, professor of economics at Duke and lead author of the study, stated:

“Paying thousands of dollars more for each home purchase obviously makes it more difficult to build home equity and wealth. Our findings highlight these disparities and point toward the need to consider what can be done to help reduce them. The hopeful news is that we do not detect any obvious pattern of prejudice by sellers, raising the prospects for addressing this issue with better real estate information and practices.”

The full article, published by the National Bureau of Economic Research, may be accessed here.

A brief video showing Dr. Bayer discussing the study can be seen below.

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