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This would be shocking news if not for the reality that blacks have the worst average credit scores of the four major racial/ethnic groups and essentially tied with Latinos for the highest default rates. Obviously banks know this, and that plays the largest role in the black home ownership rate.
The answer is not to try to generate some artificial target that can only be met with substantially relaxed lending standards – we tried that in the not so distant past and it went very, very badly. Homeownership is not for everyone, nor is it the only vehicle for building net worth. Let’s admit that and look at other policies to provide savings.
Which begs the question; why do blacks have the worst credit scores on average? Probably has something to do with centuries of systemic racism. I agree, relaxing lending standards is not the answer. The answer is fixing the judicial, educational, and other systems in our society that prevent everyone from rising out of poverty. It’s a very complex problem to solve.
Exactly. Social justice warriors want to repeat the housing crash of 2008.
IBJ – now write an article reviewing credit scores, lending requirements, etc and take the color BS out.
Lenders learned that the Clinton goal in 1979 of homeownership about 62% in America is a failing proposition.
It’s time to quit making excuses and subsidies on the backs of the responsible taxpayers of the USA.
“…above 62%…”
We bail out banks with artificial disount rates. Homeownership is the vehicle for wealth unless there is access to centuries of free labour.
2008 Market Crash Explained
The stock market crashed in 2008 because too many people had taken on loans they couldn’t afford. Lenders relaxed their strict lending standards to extend credit to people who were less than qualified. This drove up housing prices to levels that many could not otherwise afford.
Hope we don’t repeat this horrible “real history” mistake. Lives, hopes, and dreams for people of all races were shattered overnight. Recovery took years and some never recovered.
Best approach is to help the uneducated become educated. Help the unemployed become employed. Help the addicts to recovery. Help those that can’t qualify for a home loan make all the necessary changes in their lives to qualify …. regardless of race.
Ms. Nelson’s gets the right number but the math is totally wrong. The homeownership rate has nothing to do with it.
.
The Black population of the US is 13.4%, per the Census Bureau. All other things being equal, 13.4% of mortgages should be for home purchases by Black people.
.
As has been pointed out, all other things are not equal, and the solutions are complex and long-term. We didn’t get here overnight, and we won’t fix it overnight.