When the housing bubble burst in 2007, the underlying cause was the multitude of sub-prime and unsustainable loans made to families who could not afford home ownership under normal economic circumstances. And in a new report on Sept. 4, home ownership by primarily black ethnic groups has fallen back to levels not seen since 1995, when President Clinton began pressuring banks to issue mortgages to those who could not afford them, under the threat of racial bias and discrimination.
The home ownership rate for blacks fell from 50% during the housing bubble to 43% in the second quarter, the lowest since 1995. The rate for whites stopped falling two years ago, settling at about 73%, only 3 percentage points below the 2004 peak. - Zerohedge
The housing boom of the last decade, spurred on by the successive Clinton and Bush administrations that unleashed ambitious programs to widen buying, also brought about a practice known as “reverse redlining” or steering residents of minority neighborhoods into high-cost mortgages, which led to a flood of foreclosures when the market crashed. - Bloomberg
The modern housing boom began in the 1930's under President Roosevelt in an effort to stimulate the construction sector during the Great Depression. It remained steady until the 1950's, when industrial expansion opened up many Americans to begin building their 'American Dream' outside of major cities in what was to become known as the suburbs.
For black families however, the dream of home ownership was kept from them until the early 1970's when Congress began to enact new legislation in the wake of the Civil Rights movement. Many blacks were finally able to move out of the inner city and into primarily white neighborhoods where the prospect of a better life became open to them.
Yet the true rise in black home ownership came in the 1990's and early 2000's when the Federal Reserve implemented low interest rate policies, and expanded the money supply. Coupled with the creation of Mortgage Backed Securities, which allowed banks to shed their mortgages to investment firms for instant cash, banks now had a massive surplus of money to lend, and the process of lending to those who could not afford it became standard practice.
Overall, the entire country was hit hard by the bursting of the housing bubble, but it was the return by banks to scrupulous lending parameters which has affected black home ownership most of all. And while the lack of jobs and economic growth are important components, the bottom line is that it was the political moves made over the past two decades that led to high rates of home ownership, especially for those who couldn't afford it, and only now is the proper balance coming back as home affordability shrinks.