White homeowners are disproportionately refinancing their mortgages or selling their homes for equity

A new study from the Federal Reserve Banks of Boston, Atlanta, and Philadelphia utilizes anonymized data on 5.6 million mortgages to identify pandemic-era disparities in mortgage payments and home refinancing activity. The research reveals that Black homeowners have been more likely than white homeowners to have late or missed mortgage payments in the pandemic and are much less likely to have later caught up on payments. In addition, 12 percent of white homeowners have taken advantage of low interest rates to refinance their mortgages, while only 6 percent of Black homeowners have. These refinancing decisions eventually save borrowers billions of dollars, with only 3.7 percent of those savings going back to Black households. In part because Black borrowers typically have lower credit scores and higher risk for borrowing, the authors say, “borrowers who could use the payment reductions the most moving forward may be the least likely to obtain them.” #covid-19 #racialequity #housing