Wealth offers security and privilege that can last for generations. For minority households striving to achieve the American Dream, homeownership is often the surest path. Yet, in today’s environment and more than 50 years since the passing of the Civil Rights Act, the United States continues to experience a widening racial gap in home ownership.
Current policies are making homeownership for millions of creditworthy people of color unnecessarily difficult. More than ever, the U.S. needs a more modern approach to determining creditworthiness. It’s a relatively simple solution to a destructive divide among our nation’s households.
Homeownership and small business development were becoming the new norm in communities of color. That halted in 2008 when the Great Recession, created by an avoidable subprime crisis, hit the urban communities. Since the Great Recession, the racial wealth gap only widened during the economic recovery: non-minority households were better positioned to recover their losses through stocks and other assets, leaving people of color, who often hold much of their wealth in home equity, to face a slow and painful recovery.
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