Study: Black Homeowners Pay More for Mortgages
October 20, 2020
Black homeowners pay, on average, more in mortgage interest, mortgage insurance, and property taxes than other homeowners, according to a new study from Massachusetts Institute of Technology. The differences are making wealth gaps grow between Black and white homeowners, says study author Edward Golding, executive director of MIT’s Golub Center for Finance and Policy.
The study finds that the overall differences in mortgage interest payments ($743 per year), mortgage insurance premiums ($550 per year), and property taxes ($390 per year) add up to $13,464 over the life of the loan. “That amounts to $67,320 in lost retirement savings for Black homeowners,” the study notes.
Black homeowners continue to pay higher interest rates due to the lack of refinance opportunities too, Golding says in the study. This results in Black homeowners paying about $475 more per year than white homeowners.
Also, nearly a quarter of the disparity in homeownership costs for Black homeowners is due to local property assessments.
“The policy response should not be to try to justify the differential but to eliminate it,” Golding says in the study.
“The Unequal Costs of Black Homeownership,” MIT (Oct. 1, 2020) and “Study Shows Black Americans Are Paying More to Own Homes,” Yahoo News (Oct. 11, 2020)
Updated: November 30, 2020