Study: Black, Hispanic Communities Still Reeling from Foreclosure Crisis
Mike Sorohan email@example.com
More than 10 years past the Great Recession, African-American and Hispanic communities hit hard by foreclosures have yet to fully recover, said Zillow, Seattle.
The study noted in Hispanic and black communities, foreclosed home values fell by more than 50 percent. And though as the market recovered and home values rebounded, foreclosed homes saw stronger appreciation--equity growth that the former owners couldn't access. Foreclosed homes in black and Hispanic communities have more than doubled in value since reaching their lowest point, though they remain 4.7 percent and 9.5 percent below their peaks.
Zillow Senior Economist Sarah Mikhitarian said not only did the foreclosure crisis have a sharper impact on people's ability to gain wealth in black and Hispanic communities, it also had a broader reach into those areas. Nationally, 19.4 percent of all foreclosures between 2007 and 2015 were in Hispanic communities, but only 9.6 percent of homes are in those same areas. Similarly, 12.7 percent of foreclosures occurred in black communities, while 7.7 percent of all homes are in black communities.
In Atlanta, for example, 30.5 percent of all homes are in black communities, but more than half of all foreclosed homes are in those communities. Just 44.2 percent of foreclosed Atlanta homes are in white communities, compared to the overall 65.1 percent of homes in white communities.
"The housing bust and foreclosure crisis that followed resulted in a disproportionate number of people of color losing not only the roof over their heads, but the wealth--and the opportunity to potentially build more--that came with it," Mikhitarian said. "Black and Hispanic homeowners were more exposed to the foreclosure crisis because homes accounted for such a large share of their wealth. With fewer assets to draw on, it was harder for them to hold onto their homes if they fell underwater on their mortgages, owing more than their home was worth. For people who ultimately succumbed to foreclosure, they missed out on the opportunity to see their home's equity--and therefore their wealth--climb back up."