Racial disparities in the housing market are well documented. Large homeownership rate gaps between Black and Latinx households and white households persist mostly unchanged since the 1960s, when race-based housing discrimination was legal. Evidence shows that Black and Latinx mortgage applicants are denied at higher rates than white applicants, even when controlling for borrower characteristics, a discrepancy that is driven in part by the systemic disadvantages created by a legacy of racist housing and credit legislation.

But most research on racial disparities in the housing market defines race and ethnicity according to the identity of the primary borrower or head of household, ignoring coapplicants or coheads of household. When the race and ethnicity of both borrowers is included, we find that households where the coheads have different racial or ethnic identities have distinct outcomes in the mortgage market, with their denial and homeownership rates falling between that of dual-white households and dual-Black or dual-Latinx households, regardless of which member is tagged as the primary applicant or head of household.

With the share of dual-racial and dual-ethnic households continuing to grow in the US, dual-race or dual-ethnicity coborrowers are becoming a larger share of mortgage applications, especially among younger borrowers and borrowers in western states. A vast majority of dual-race coborrower pairs include one white borrower. As a result, relying solely on the primary borrower’s race and ethnicity will increasingly distort our understanding of the housing market.

Read the full article about housing and race by John Walsh and Amalie Zinn at Urban Institute.