A new report featured yesterday at the Congressional Black Caucus Foundation’s 43rd Annual Legislative Conference in Washington, D.C., finds that many African American and Latino families are still reeling from the effects of the Great Recession. The report, “The State of Housing in Black America,” was published this week by the National Association of Real Estate Brokers and identifies some alarming statistics:
● Homeownership rates for African Americans have dropped from a high of just under 50 percent in 2004 to just above 43 percent today.
● From 2005 to 2009, African American and Latino households lost 53 percent and 66 percent of their net worth, respectively, while non-Hispanic White households lost just 16 percent.
● African Americans and Latinos are greater than 70 percent more likely to have been foreclosed upon, even when controlling for income. African Americans have 7.8 percent of mortgage originations, but 11.6 percent of completed foreclosures.
● The private housing market, backed by Fannie Mae and Freddie Mac, is effectively closed to people of color as credit score and down payment requirements have risen substantially. More than half of all home loans to African Americans and Latinos occur via the Federal Housing Administration (FHA).
Jim Carr, one of the authors of the report, said: “The State of Housing in Black America” examines the worsening racial economic disparity gap since the financial crisis and onset of the Great Recession in 2007, describing how African Americans and Latinos have become more cut off from the housing market and home finance system while also losing significant employment ground. This study highlights that the economic losses experienced by African-Americans as a result of the foreclosure crisis and downturn in the economy were substantial and that neither the current economic rebound nor housing recovery are benefiting substantially the Black community.”
The report makes several recommendations for reform:
● Re-engineer the housing finance system in a manner that makes providing affordable mortgage credit its principal goal.
● Ensure that an adequate supply of credit for rental housing is available.
● Establish a Housing and Community Infrastructure Bank to jump start investment, particularly in communities that have been hardest hit by the foreclosure crisis and economic downturn to rebuild neighborhoods, create jobs and stimulate the economy.
Carr says that failure to address the issues “may leave African Americans struggling for a decade or more to recover.”