Recent housing recovery has not reached black and Latino families, who are less likely to own homes and more likely to face foreclosure
Despite a general upswing in economic fortunes for many Americans in recent months, the economic rebound and housing recovery largely have left black and Latino households behind, according to a recent report from the National Association of Real Estate Brokers.
NAREB’s report, “The State of Housing in Black America,” states that homeownership rates for black Americans have dropped from a high of just under 50 percent in 2004 to just above 43 percent today.
Home prices in general are on the rise, up 23 percent from the bottom in March 2012, according to RealtyTrac, a real estate data source. July data showed a 38 percent decrease of foreclosure filings year over year.
However, the NAREB report shows that black Americans are still 70 percent more likely to have been foreclosed upon, even when controlling for income. And the private housing market has been “effectively closed” to people of color because of stricter credit score and down payment requirements.
This negative impact was a result of “unregulated, high-cost and unsustainable subprime loans during the bubble,” which the report’s authors say were targeted at black Americans and Latinos.
Additionally, NAREB cites a lack of affordable rental homes in the U.S. as a significant problem for minority households.
The report states, “While people of color will represent 7 of 10 new household formations in the coming decade, the national housing policy debate ignores economic challenges facing black and Hispanic Americans.”
NAREB’s policy recommendations to combat the current situation include reforming the housing finance system to allow for affordable mortgage credit, ensuring an adequate supply of credit for rental housing is available and establishing a special bank to jump start investment, especially in hard-hit communities.