WHEN the U.S. housing bubble peaked a decade ago, soon to burst with far-reaching consequences, the pain was particularly severe for black and Hispanic Americans.

    A disproportionate number of minorities succumbed to subprime mortgages and foreclosures and lost their homes. Their collective loss of home equity and shift toward rental housing could widen America’s racial and ethnic divides well into the future, according to researchers and housing advocates.

    The drop in home ownership has grown so severe that it could impede wealth creation for generations of minority families, said Antoine Thompson, executive director of the National Association of Real Estate Brokers, the nation’s oldest minority trade association.

    The decline dovetails with a broader shift toward renting in the aftermath of the housing bust. An analysis by The Associated Press has found that rising rental costs and stagnant pay are making it harder to save to buy a home. Longtime homeowners, by contrast, have enjoyed rising home equity and lighter mortgage bills resulting from lower mortgage rates.

    The problem is most pronounced among minorities who already had lower ownership rates before the bubble. Actions such as “redlining” — which for decades denied loans to minorities — excluded black neighborhoods from government-backed mortgages. This made it harder for minorities to buy even as the U.S. economy surged after World War II and overall home ownership rates climbed.

    Many minority homeowners who bought or refinanced during the bubble eventually became trapped by predatory mortgages, some requiring no money down and monthly payments that eventually ballooned.

    Just 41.5 percent of black households own their homes, down from nearly 50 percent in late 2004, according to the Census Bureau. The share of Hispanic homeowners dropped to 45.3 percent from roughly 50 percent. Both drops were sharper than the decline in white home ownership — to 72.1 percent from roughly 75 percent.

    The Urban Institute forecast last year that Hispanic home ownership will rise slightly through 2030 but that black homeownership will tumble to 40 percent by 2030 if U.S. economic growth is about average and 38 percent if growth is slow.

    A series of sudden emergency expenses cost Carmen and Ricardo Ramirez their one-bedroom condominium in Washington Heights, a neighborhood near Manhattan’s northern tip.

    The couple had bought their home in 2005 for US$299,000 with an adjustable-rate mortgage that was popular during the bubble and destructive during the bust once the interest and principal payments were adjusted higher.

    Life seemed manageable until 2010, when the recession forced them to close their steakhouse restaurant. Then Ricardo suffered a traumatic brain injury during a fall in 2011, and Carmen suffered a back and leg injury in 2012. Her parents later died, and the funeral costs caused the couple to miss mortgage payments, triggering fees for late payments that led to foreclosure.

    “Have you ever heard the saying, when it rains, it pours?” said Carmen, 61. “Well, it was one after the other with us.”

    Bankruptcy failed to save the condo, which their board refused to let them sell at a loss.

    Now, the couple is out of their home and in an assisted living facility after receiving relocation help from the Center for New York City Neighborhoods, which promotes affordable homeownership. (SD-Agencies)