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Understanding the unequal costs of Native American homeownership

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  • Banga, Helen
  • Feir, Donn L.
  • Gregg, Matthew T.

Abstract

While there is an extensive literature on racial disparities in mortgage lending, Native American borrowers are often excluded from these studies. Using confidential Home Mortgage Disclosure Act (HMDA) data from 2018 to 2021, we examine differences in home loan prices between White and Native American borrowers, located on and off federally recognized reservations. We find significant disparities in loan prices between White and Native American borrowers, regardless of reservation status. When we incorporate newly available applicant characteristics – such as credit scores and property values – we discover that these factors account for 67 percent of the price gap for off-reservation Native loans, but only 16 percent for on-reservation Native loans. The remaining price disparities for both on- and off-reservation Native loans are driven by the higher use of home-only loans, which are loans not secured by land. The greater reliance on home-only loans by Native borrowers cannot be explained by differences in property rights: in fact, Native landowners are more likely to use a home-only loan to purchase a manufactured home than comparable White landowners. Other explanations for the disproportionate use of home-only loans, such as racial disparities in mortgage approvals, proximity to a manufactured home dealership, faster home-only loan processing times, and differing degrees of trust in banks, are also ruled out.

Suggested Citation

  • Banga, Helen & Feir, Donn L. & Gregg, Matthew T., 2026. "Understanding the unequal costs of Native American homeownership," Journal of Housing Economics, Elsevier, vol. 71(C).
    • Handle: RePEc:eee:jhouse:v:71:y:2026:i:c:s1051137726000033
    DOI: 10.1016/j.jhe.2026.102122
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    Cited by:

    1. Dikgang, Johane & Magambo, Isaiah & Amadu, Festus O. & Magnier, Alexandre, 2026. "Housing Assistance and Eviction Prevention During Compound Crises: Evidence from the COVID-19 Pandemic," GLO Discussion Paper Series 1735, Global Labor Organization (GLO).
    2. Dikgang, Johane & Magambo, Isaiah & Amadu, Festus O. & Magnier, Alexandre, 2026. "Housing Assistance and Eviction Prevention During Compound Crises: Evidence from the COVID-19 Pandemic," GLO Discussion Paper Series 1735 [rev.], Global Labor Organization (GLO).

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    Keywords

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    JEL classification:

    • G50 - Financial Economics - - Household Finance - - - General
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand

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