Small-Mortgage Shortfall Threatens Minorities' American Dream

A Reuters article cited research by the Future of Land and Housing program and the Center for the Study of Economic Mobility (CSEM) at Winston-Salem State University on how a decline in small-dollar mortgage lending harms low-income homebuyers and neighborhoods, particularly within the Latino community.

“Lack of access to small mortgages can also affect communities, said Craig J. Richardson, director of the Center for the Study of Economic Mobility at Winston-Salem State University in North Carolina.

The lack of access to small mortgages in the poor East Winston area may have stopped it from bouncing back after the financial crisis, he said, while empowering institutional homebuyers, who have increasingly turned available housing into rentals.

Compared with richer areas in Winston-Salem, property values in East Winston dropped more than 45% since 2013, Richardson and a co-author recently found, following a ‘huge withdrawal from banks servicing this market.’

That has created a vicious circle: a decade and a half ago, about 70% of the neighborhood’s homes were owner-occupied, Richardson said, while today that figure is less than a third.”

Read the full Reuters article here, and see more of New America's small-dollar mortgage lending research here.