It won’t come as any surprise that mortgage lending exploded during the early part of the 2000s before crashing in 2008 and 2009 after the housing bust.
But a new series of maps from the Urban Institute helps illustrate the severity of that boom and bust by shining a light on metro areas and individual neighborhoods. They show where some 100 million mortgages were made between 2001 and 2012.
It also reinforces just how much the lax-lending environment of the mid 2000s fueled a big increase in borrowing by minorities, particularly Hispanics and African-Americans, who tended to have lower homeownership rates, median incomes and overall wealth. Many of those communities were particularly hard hit by the foreclosure crisis, with defaults both from newly minted homeowners as well as those who used rising values to pull cash out of their homes.
The Urban Institute report by researchers Bing Bai and Taz George uses federal lending records released annually under the Home Mortgage Disclosure Act. It shows how African-American and Hispanic borrowers accounted for a rising share of mortgage lending just as the housing bust neared its peak.
Tighter lending standards since 2009 have squeezed borrowers with less wealth and lower incomes, which means there’s been a corresponding drop in minority borrowing.
Overall, lending to blacks and Hispanics increased 83% from 2001 to 2006, and then dropped 68% in the following three years. In Los Angeles, for example, Hispanics accounted for 38% of mortgages in 2005 but just 19% in 2012.
The maps show just how severe the economic crisis has been in Detroit, where population flight out of the largely African-American neighborhoods of the inner-city shows very little new lending. From 2006 to 2012, the number of loans made within the metro area fell 79% for African Americans compared to 11% for whites.
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