Hurt by Housing Bust, Black Homeowners Miss Out on the Recovery

September 5, 2013
Bloomberg BusinessWeek  
mortgage lending news

Black Americans are burdened with a new set of challenges as the housing market recovers. "Because African American buyers were last into the market and bought at the most inflated prices, when the market deteriorated, they were the ones who lost the most," explains Spencer Cowan of the Woodstock Institute, a Chicago-based nonprofit that researches fair lending, foreclosures, and wealth creation.

The homeownership rate for Black Americans fell from 50 percent during the property boom to 43 percent in the second quarter of 2103, the lowest since 1995. Eleven percent of black borrowers lost their homes to foreclosure during the housing collapse -- nearly twice the rate of white homeowners -- according to a 2012 report from the Center for Responsible Lending. Although the market is now rebounding, affordable properties are in short supply due to house flippers, private equity firms, and other buyers who can pay cash; and the unemployment rate for blacks is almost double that of whites. "African Americans are starting way behind into this recovery," Cowan laments.

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