Last Thursday, Zillow released a report on minority access to mortgages in partnership with the National Urban League. In case you were wondering what the conclusion of the report might have been, it was titled, “A House Divided: How Race Colors the Path to Homeownership“. The topline conclusion comes from Stan Humphries, Zillow’s Chief Economist and its lead point person on policy matters (along with Katie Curnutte, Zillow’s extremely able head of PR):
It’s been more than 50 years since Dr. King fought for equality, yet it is apparent that the American dream of homeownership is not equally shared by all, even today. Our research shows that minority home buyers are encountering difficulties that often aren’t shared by white home buyers, and that even after they achieve the dream, they have been less likely to see a similar return on their investment.
Sounds dire. Horrible. How can this be in 2014?!?
And Marc H. Morial, president and CEO of the National Urban League, beats along with the drumbeat, saying there is “hard work that remains to ensure that all Americans achieve the dream of homeownership and begin to build real and lasting wealth.”
The House Divided report was released to coincide with the live web-streamed Town Hall meeting with HUD Secretary Shaun Donovan, scheduled for tomorrow. The topic? If you guessed how hard minorities have it when it comes to housing, you get a cigar. The event is actually entitled, “Building Equality in Housing”.
There’s just one small problem. These conclusions and these highly charged assertions are simply not supported by the data.
I received the advance copy of the Report last week, and immediately saw some issues. I haven’t written about the Report because I wanted to clarify a few things to my satisfaction. To Zillow’s credit, it has been nothing but responsive and helpful, and I’ve had a chance to speak with Stan Humphries, Katie Curnutte, and with one of the economists on Zillow’s staff who worked on the report, Skylar Olsen. They were extremely helpful despite the fact that it was obvious from the get-go that I was highly skeptical.
In fact, they sent me a subset of the Home Mortgage Disclosure Act (HMDA) dataset they used for the report, and allowed me to do some investigating of my own. (If they sent me the full dataset, I’d have needed a new computer….) Let me cover the Zillow report first, then get into why I think this is a completely unwarranted leap based on extremely thin, if not nonexistent, evidence.