RELEASE: New CAP Analysis Uncovers Persistent Discrimination Against African American Borrowers in the Housing Market

Washington, D.C. — New analysis from the Center for American Progress uncovers numerous signs of persistent residential segregation among African American home mortgage borrowers, a troubling finding as the Trump administration continues to weaken or roll back fair housing policies and integration remedies.

“Although the Fair Housing Act has succeeded in eliminating the most blatant forms of discrimination that were common 50 years ago, the U.S. housing market is still highly segmented along racial lines,” said Michela Zonta, senior policy analyst at CAP. “The legacy of federal redlining and discriminatory housing policies and private practices is still visible today, as housing discrimination has taken different forms and African American neighborhoods continue to be devalued compared with white neighborhoods.”

CAP’s report focuses on the residential patterns of black and non-Hispanic white home mortgage borrowers and the racial disparities in home appreciation in neighborhoods where these borrowers purchase their homes. CAP’s analysis of mortgage data show that while lending to African American borrowers has continued to expand after the housing crash of 2007, harmful segregation patterns persist. In postrecession years, African American and non-Hispanic white home mortgage borrowers have continued buying properties in separate neighborhoods. CAP found that similar to prerecession years, African American borrowers still buy homes in neighborhoods with large populations of people of color: On average, 51 percent of the population in the neighborhoods where African Americans typically buy their homes consists of people of color, compared with only 22 percent of the population in neighborhoods where white homebuyers predominate.

CAP’s research also showed that African American home mortgage borrowers remain concentrated in residentially segregated areas where homes have failed to appreciate at the same pace as those in neighborhoods where white borrowers more predominantly buy their homes. On average, the neighborhoods where African American borrowers bought their homes during the housing boom from 2003 to 2007 feature prices that are still lower than those before the financial crisis. In 2017, home prices in these neighborhoods were 7 percent lower than in 2006. In contrast, home prices in neighborhoods where average white homebuyers purchased their homes during the same period have recovered; they increased by 2 percent between 2006 and 2017. More broadly, racial disparities in home appreciation have persisted nationally even in the aftermath of the Great Recession, despite a general increase in home prices.

The analysis also revealed racial disparities in the largest markets where black homebuyers concentrate. In cities with a larger black population compared with the national average—for example, Washington, D.C., Baltimore, and Atlanta—black home mortgage borrowers are still underrepresented. Consistent with national trends, black homeowners obtain proportionally fewer loans than white applicants do, even when borrower’s income is accounted for.

CAP’s report concludes that housing discrimination—along with persisting residential segregation—continues to hamper African American homebuyers’ ability to build equity. While eliminating segregation will require tools that are beyond the scope of federal fair housing policy, CAP notes that fair housing policy represents a critical starting point for preventing and eliminating the various forms of discrimination in the housing market that perpetuate segregation and its consequences. The report makes recommendations for strengthening fair housing enforcement, including:

  • Making local jurisdictions once again responsible for planning to achieve fair housing. The 2015 Affirmative Furthering Fair Housing (AFFH) rule should be fully reinstated. The implementation of the AFFH rule should be resumed and expanded, as it provides a critical tool to combat discriminatory practices and persisting residential segregation patterns while promoting more equitable investment in communities of color across the United States that continue to be devalued and feature a low housing demand.
  • Empowering federal, state, and local governments and nonprofits to fully enforce the Fair Housing Act. More funding should be appropriated for the Fair Housing Initiatives Program (FHIP) and for staffing in the U.S. Department of Housing and Urban Development’s (HUD) Office of Fair Housing and Equal Opportunity (FHEO). FHIP should also support proactive investigations that are independent of individual complaints in order to uncover systemic discriminatory practices that are difficult for victims to detect; expand scrutiny on actors than are not well covered by existing fair housing laws; monitor discriminatory practices in communities at risk; and explore strategies that are effective in deterring discriminatory practices and reversing segregation patterns.
  • Catching and stopping systematic discrimination, rather than perpetuating it. The disparate impact standard is a critical tool for detecting and addressing discriminatory housing practices that systematically affect communities of color but are difficult to prove. It is essential that HUD firmly enforce, rather than reconsider and dilute, the Fair Housing Act’s disparate impact rule.

Click here to read “Racial Disparities in Home Appreciation” by Michela Zonta.

For more information or to speak with an expert, contact Allison Preiss at or 202.478.6331.