This note examines the effects of community socioeconomic status on mortgage lending patterns
in Metropolitan Detroit. Data from 2000 HMDA reports and the 2000 U.S. Census are analyzed using
multiple regression. The results from this analysis have two important implications for research on
mortgage lending. First, they indicate that the effects of variables linked to a community’s socioeconomic
status on mortgage lending patterns are highly intercorrelated. As a result, variations in mortgage lending
appear to be the result of the combined effects of a number of socioeconomic variables acting together.
Second, the results from this analysis indicate that the socioeconomic status of a community is positively
correlated with mortgage lending activity. In other words, a decline in neighborhood socioeconomic
status is significantly correlated with a decline in mortgage lending