Federal Reserve Bank of Atlanta

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This paper finds that mortgage refinancing benefits from lower interest rates during the pandemic have not been shared equally among racial and ethnic groups. Based on a sample of 5 million mortgages, the authors estimate that only 6% of Black borrowers and 9% of Hispanic borrowers refinanced between January and October 2020, compared with almost 12% of White borrowers. Among those who experienced distress during the peak months of May and June 2020, the percent who were still behind on their mortgage payments as of February 2021 was 9 percentage points higher among Black borrowers and 2.2 percentage points higher among Hispanic borrowers as compared to White borrowers.
The blog links both prior and forthcoming research on when consumers are likely to stop paying their mortgages due to a “double trigger” from income shocks due to job losses or other events that then cause drops in housing prices. The authors conclude that income support to households and small businesses in the wake of the COVID-19 pandemic has limited disruption to date in the housing market in addition to supporting individual families.