Residential Mortgage Default in Low- and High-Minority Census Tracts


  • Authors' Note: Camille Pedersen received her masters degree in Family and Consumer Sciences from Utah State University. Lucy Delgadillo is an assistant professor at Utah State University.


The purpose of this study is to examine housing, demographic, and economic characteristics of the owners in census tracts with high residential mortgage default rates. In addition to these variables, the effect of being a minority is studied. Descriptive statistics and correlations are used to profile the characteristics of the census tracts and to determine which characteristics had statistical significance with mortgage default rate as well as minority percentage. Logistic regression is conducted to create a model describing the characteristics of the census tracts that have high rates of default. The statistical model shows that census tracts with high minority concentrations might be associated with higher rate of mortgage default; however, this could be explained by the fact that census tracts with higher minority concentrations typically have more economic disadvantages, which is the real cause of default, not their minority status per se.