##ownership rates fell the most for households with income of $ 20, 000 or less, according to the federal reserve ’ s survey of consumer finances. 4 data from the census bureau show that, over the period from 2004 to 2012, the homeownership rate fell about 5 percentage points for african americans, compared with about 2 percentage points for other groups. 5 homeownership rates fall when existing homeowners lose or leave their properties, when barriers to homeownership increase, or both. in recent years, both factors have been important. as i mentioned, home loss through foreclosure, though down from its peaks, remains an important problem, with lower - income and minority homeowners often being the hardest hit. importantly, foreclosures can inflict economic damage beyond the personal suffering and dislocation that accompany them. foreclosed properties that sit vacant for months ( or years ) often deteriorate from neglect, adversely affecting not only the value of the individual property but the values of nearby homes as well. concentrations of foreclosures have been shown to do serious damage to neighborhoods and communities, reducing tax bases and leading to increased vandalism and crime. thus, the overall effect of the foreclosure wave, especially when concentrated in lower - income and minority areas, is broader than its effects on individual homeowners. a strengthening housing market will help to gradually undo that damage, but the process has only begun. homeownership rates have also declined because fewer households have chosen, or have been able, to become new homeowners in recent years. buying a home usually means obtaining a mortgage, and the data show that the pace of mortgage lending has fallen considerably on a national basis ; the extension of first - lien mortgages to purchase homes fell by more than half from 2006 to 2011 and now stands at the lowest level since 1995. 6 again, this is a staff calculation for 2012 : q2 based on data from the mortgage bankers association ’ s national delinquency survey. see u. s. census bureau ( 2012 ), “ housing vacancies and homeownership ”, webpage, third quarter, historical tables, table 16, available at www. census. gov / housing / hvs / data / histtabs. html. derived from the board ’ s survey of consumer finances. see jesse bricker, arthur b. kennickell, kevin b. moore,

and stateand local - government efforts to promote family financial security and opportunity. more generally, community organizations like operation hope have played an important role in helping low - income and minority communities weather the storm of the past few years. besides promoting financial literacy and providing counseling ( and sometimes credit ) for homebuyers, community organizations have helped build small businesses through investment and technical assistance. organizations such as neighborworks america ( and as an aside, federal reserve governor sarah bloom raskin currently chairs its board ) have been leaders in fighting the blight in neighborhoods with high rates of foreclosure. unfortunately, just as families have been hurt by the financial crisis and recession, so have many community - based organizations. these groups face the daunting task of finding new sources of capital and investment in a constrained financial environment. some organizations have begun to retool their operations and develop new markets, products, and strategies to better serve the financial needs of consumers and communities. among other goals, they are developing strategies to foster responsible homeownership, which they see as an important building block for stronger communities. to return to where i began, after a long and difficult period, we are seeing welcome signs of improvement in the housing market. an improving housing market will in turn aid the economic recovery while strengthening neighborhoods and increasing the financial well - see u. s. department of housing and urban development ( 2012 ), pre - purchase counseling outcome study : research brief housing counseling outcome evaluation ( washington : hud ), www. huduser. org / portal / publications / hsgfin / pre _ purchase _ counseling. html. see j. michael collins and maximilian d. schmeiser ( forthcoming ), “ the effects of foreclosure counseling for distressed homeowners ”, journal of policy analysis and management. bis central bankers ’ speeches being of families. our recovery must be broadly felt to be complete, and families and communities that were already struggling before the crisis must be included in that recovery. as dr king is widely quoted to have said, “ we may have all come on different ships, but we ’ re in the same boat now. ” the federal reserve will continue to do what we can to support the housing recovery, both through our monetary policy and our regulatory and supervisory actions. but, as i have discussed, not all of the responsibility lies with the government ; households, the financial services industry, and those in the nonprofit sector must play their part as well.