WELCOME HOME

Owning one’s own home has long been a smart way of building intergenerational wealth that most minorities have denied. During the pandemic, with low interest rates and government stimulus programs, the homeowner’s racial gap contracted, but since then it has expanded into the widest chasm in a decade according to the National Association of Realtors. In July, the Federal Reserve recommended even more constraints. Their proposed changes would force banks to keep more capital for residential mortgages mad with smaller down payments. To accomplish this, banks will demand higher mortgage rates for borrowers who can afford to pay only a minimum down. They claim that such loans are less reliable, so banks should protect themselves by retaining greater reserves against defaults. Advocates say this is necessary to ensure the banking system remains sound. The NAACP, the National Urban League and the Urban Institute are all skeptical. The Urban Institute’s investigation into the scheme’s bearing on lowerincome minorities determined it as “particularly perverse in the face of efforts by the bank regulators and other government agencies to encourage banks to increase their lending to precisely these borrowers and communities.” Meanwhile, Black home loan applicants are usually more likely to be denied...