From Stephen Malpezzi, professor and Lorin & Marjorie Tiefenthaler Distinguished Chair of Real Estate at the Wisconsin School of Business:
Several weeks ago I participated in a panel discussion on racial segregation at the Wisconsin Union. In response to a few requests I've attached some of the data and references I provided as background to the panel.
Among numerous points you can glean from these, note the following:
(1) Despite some slow progress, U.S. housing markets remain highly segregated by race. Segregation by income potentially explains some, but by no means all, of this segregation.
(2) Black-headed households are less likely to be homeowners than whites, even after controlling for income.
(3) Racial differences in housing prices are still debated somewhat; but the weight of careful studies that control for the quality of housing consumed suggests that housing in black areas trades at a discount. This is consistent with a world in which at least some whites are willing to pay a premium to live in white areas.
(4) Blacks are more likely to be turned down for mortgage loans than whites, and more likely to be offered a subprime loan, even after controlling for income. But it is devilishly hard to establish clearly whether this is due to discrimination (witting or unwitting), because nobody has yet been able to put together the kind of data needed to answer the question unambiguously. Partly it's a matter of obtaining all the variables (such as credit score, which has been obtained for a few studies) and partly because it's important to collect data on all stages of the process, e.g. including potential applicants who did not, in the end, submit an application (which has not been obtained for any studies I've seen).
(5) Foreclosures have hit many black neighborhoods especially hard in the past two years. The Wisconsin Foreclosure and Unemployment Relief Plan is one approach that aims to mitigate the foreclosure problem by tying a housing voucher to unemployment.
You can continue the discussion and share your thoughts in the comments.