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BUSINESS
Zillow

Housing bust hurt minority home values most

Julie Schmit
USA TODAY
A "bank owned" sign is seen on a home that is listed as a foreclosure on a HUD website, in Hawthorne, Calif. in 2010. A new study by Zillow and the National Urban League finds home values fell hardest in minority neighborhoods during the housing bust.
  • Home values fell more than 46%25 in largely Hispanic neighborhoods%2C study finds
  • White neighborhoods saw 24%25 drop in values during housing bust
  • Values in Hispanic neighborhoods have recovered faster%2C too

The rise and fall of home values during the U.S. housing bubble disproportionately affected black and Hispanic homeowners, show new data from market researcher Zillow.

Hispanic communities were hit hardest, with home values in their neighborhoods falling an average of 46% from the height of the bubble to the bottom — generally from mid-2007 to the end of 2011.

Meanwhile, communities where blacks were the predominate group saw values drop 32.3% in the same period.

Declines of almost 24% were experienced by largely white communities and 20% in predominately Asian communities, according to the analysis, which combines U.S. Census Bureau data with Zillow home value data.

Even though Hispanic communities were hardest hit, they've been faster to recover, too.

Home values in Hispanic communities have increased more than 25% from the bottom of the market, compared with an only 13% rebound in black communities, Zillow says.

The research, which was done with the National Urban League and included a homeowner survey, also reveals differences in home loans.

While blacks make up 12.1% of the U.S. population, they filed 6% of all mortgage purchase applications in 2012. Meanwhile, Hispanics, at 17% of the population, filed 9% of the applications. In contrast, whites, representing 63% of the population, filed almost 65% of home purchase applications that year.

The research is based on Home Mortgage Disclosure Act data provided by mortgage lenders to the federal government, says Stan Humphries, Zillow chief economist.

Hispanics and blacks were also more likely to apply for Federal Housing Administration, or FHA, loans than for conventional loans, the study says.

The research shows that "FHA does play a special role providing mortgage access to minority buyers," Humphries says.

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