Housing Market Rebound Not For Everyone Say Civil Rights Groups

Business headlines across the country repeatedly stress that the US housing market is on the rebound following the worst collapse in history in 2008.  However, property values are not rising consistently across the country, and the reality of the housing market further highlights the divide between rich and poor Americans.

Following the housing crash in 2008, millions of homes saw their values depreciate, leaving homeowners paying more for mortgages than their homes were worth.  Over the last seven years, some homes have regained that lost value, but others remain deeply underwater.

According to CBS News, using data compiled by the Wall Street Journal and real estate firm CoreLogic, approximately 15 percent of homeowners with properties valued at less than $200,000 owe more on their mortgages than the home is worth.  CoreLogic found that only 6 percent of homes valued at more than $200,000 remain underwater.

There is another element to the property value equation, according to the American Civil Liberties Union (ACLU).  The majority of underwater mortgages and homes valued at less than $200,000 are held by visible minorities.

The ACLU compiled a report identifying how many minority American families are stuck in low income, underprivileged neighborhoods due to unmanageable loans.  The ACLU predicted that the disparity of home values among black and white families would approach parity within the next two generations had it not been for the 2008 housing crash.

“As a result of the Great Recession, however, the gap between black and white home equity will likely remain large decades into the future.”

The ACLU report mentions the amount of subprime loans issued in the years preceding the housing crash as one of the principle reasons for the home value disparities today.  The organization says black families were unfairly subjected to subprime mortgages that dissolved into unmanageable loans following the recession.

To help minority families escape their underwater financial situations, the ACLU recommends improving regulations to prevent unfair lending.  A recent ruling by the Supreme Court that expanded the power of the Fair Housing Act will allow hard working families of all ethnicities to apply for affordable home financing in any number of neighborhoods – a good first step towards the ACLU’s long term goal.

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