Who suffered the greatest loss in housing wealth when the housing market collapsed? If you disaggregate the population by Census categories, the answer is Hispanics. Wonkblog's Lydia DePillis links to a vivid graph from a report compiled by Zillow. Hispanic homeowners' housing prices dropped 46 percent from peak to trough, compared to 32 percent for blacks, 24 percent for whites and 20 percent for Asians. There's been some rebound since the trough period, but measuring from peak to present housing values for Hispanics are down 33 percent, compared to 23 percent for blacks, 13 percent for whites and 1 percent for Asians.

In these numbers I find support for my estimate that one-third of housing foreclosures in the 2007-10 period involved Hispanic homeowners. I derived this estimate from the RealtyTrac data for foreclosures by county, which showed that foreclosure rates were especially high in California's Inland Empire (Riverside and San Bernardino counties), metro Las Vegas (Clark County), metro Phoenix (Maricopa County) and metro Orlando (Orange and Osceola counties). The human story I see behind these numbers is one of dreams shattered; the policy story is one of well-intentioned folly. Public policy, aided and abetted by Fannie Mae and Freddie Mac, resulted in mortgages being granted to non-creditworthy minorities, especially Hispanics in these fast-growing areas. The dreams were of accumulating significant wealth through the supposedly inevitable increase in housing values.

For a while it looked like the policy was working and the dream was being fulfilled: Homeownership among Hispanics rose to record highs and their housing values from 2000 to 2006 increased more rapidly than for blacks, whites or Asians. Then came the crash. Suddenly a huge number of Hispanics who had only recently received mortgages found themselves under water -- many of them deep under water. I think there's a link here with the very sharp decrease in Hispanic immigration (net migration from Mexico to the United States from 2007 to 2012 was zero). People migrate in large numbers not just in response to economic incentives but also to pursue dreams or escape nightmares, as I argue in my 2013 book Shaping Our Nation: How Surges of Migration Transformed America and Its Politics. For Hispanics, the United States after the housing price collapse looks less like a dream and more like a nightmare.

Lesson: it’s not a good idea to incentivize home ownership for people who are not creditworthy, whatever their racial classification.