The Black Tax
As we noted late last week, African-Americans and Hispanics have a heck of a time enjoying the benefit of low mortgage rates despite like-kind default risk to white borrowers. A new MIT study goes farther, finding that Blacks on average pay $13,464 more than whites over the life of their mortgage loans, calling this a “Black tax” on home ownership. Like the Boston Fed study, this one finds that GSE mortgages are disproportionately pricey for Blacks, increasing political risk to Fannie and Freddie along with still more pressure on risk-based pricing.

GSE-102120.pdf