The Housing Recovery Is Leaving Minorities Behind

It's hard to get a mortgage right now – not just relative to the free-for-all days at the height of the housing boom, but compared even to what now feels like the housing market's last moment of "normal." Let's call that, say, 2001. Back then, lenders weren't doling out loans with the gleeful abandon of the housing bubble. But they were considerably more welcoming than they are today of would-be homeowners without pristine credit.

If we compare the housing market today to this pre-bubble moment, many people who might have qualified for mortgages by 2001 credit standards are walking away empty-handed. In some sense, their loans have gone "missing," a casualty of today's abnormally tight credit.

Exactly how many loans are we talking about? Using the most recent data from 2012, Laurie Goodman, Jun Zhu and Taz George at the Urban Institute's Housing Finance Policy Center peg the number at about 1.2 million. That figure represents would-be borrowers who would have met the credit standards for a mortgage before the bubble ever inflated. These are not your 25-year-old baristas buying a first condo on $30,000 a year circa 2005. These are individuals and families whose credit would have qualified them for a home loan at just about any other moment in recent history.

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