Tesco
Credit Availability and the Decline in Mortgage Lending to Minorities after the Housing Boom
Article

Credit Availability and the Decline in Mortgage Lending to Minorities after the Housing Boom

Neil Bhutta and Daniel Ringo
Federal Reserve Board, 2016
Read the article

Read or listen offline

audio autogenerado
  • 0.5×
  • 0.75×
  • 1×
  • 1.25×
  • 1.5×
  • 1.75×
1×
audio autogenerado

Editorial Rating

8

Qualities

  • Analytical
  • Innovative
  • Eye Opening

Recommendation

The American Dream, of which home ownership is one critical component, is increasingly out of reach for many US citizens. Just prior to the onset of the 2008 financial crisis, home ownership rates began falling for minority borrowers, particularly for African-American and Hispanic individuals. After the housing bubble implosion, ownership rates among minorities have fallen even more precipitously. While many politicians argue this dynamic may have a racial component, economists Neil Bhutta and Daniel Ringo contend that credit conditions provide a more plausible scenario. getAbstract recommends this concise and analytical report for its detailed examination of the current state of home lending to and borrowing by minorities.

Take-Aways

  • For minorities in the United States, specifically African-Americans and Hispanics, a drop-off in home ownership rates began in 2006 and fell considerably through 2014.
  • In contrast, the market share trajectory for white mortgagors rose from 60% to just less than 70% over the same time period.
  • The lowest score necessary to obtain a mortgage in the United States increased substantially and therefore drove many borrowers out of the marketplace.

About the Authors

Neil Bhutta is a principal economist at the Federal Reserve Board of Governors, where Daniel Ringo is an economist.

Comment on this summary or Comenzar discusión