Can Black Homeownership Bounce Back?
By Taylor Durham
African American homeownership lags behind the rate for all Americans
Philadelphia & Washington, D.C. have the highest rates of black homeownership at 48.4% and 48.3%
African American homeownership has slid over the last decade whereas homeownership rates overall have steadily increased. A Harvard study noted that the rates were among the lowest since the Fair Housing Act was passed in 1968, effectively erasing all the gains the black community has made within with last 50 years. What has happened in that timeframe to reverse such progress?
Why This Matters: Black homeowners were victims of predatory banking practices in the years leading up to the 2007 financial crisis. These home buyers were offered subprime loans, the same type that caused the housing crisis and in turn lost their homes at alarming rates. No other demographic was hit as hard. It wasn’t until years later and after multiple investigations, that it was brought to light how banks and mortgage lenders conspired to market loans as with higher interest rates as “favorable”.
Since 2001, black homeownership has declined 5%, compared to 1% for white families and 0.2% for Hispanic families. As a counterpoint, major metros areas such as Philadelphia, Washington, D.C, Baltimore, and Atlanta carry the highest rates of black homeownership at 48.4, 48.3, 44.6, and 44.7 percent respectively.
The passing of the Fair Housing Act in 1968 was designed to outlaw housing discrimination across the United States. It barred controversial tactics such as imposing different sales prices or rental changes to different customers for the same property, harassment of tenants, and outright refusal to rent or sell housing. Still, even with laws in place, real estate companies and banks have found loopholes that allow them to operate in legal “gray areas”.
Situational Awareness: Homeownership remains one of the best ways to accumulate generational black wealth and is more financially beneficial than renting. In the aftermath of the financial crisis, home ownership became even more difficult with new parameters in place, increasing the difficulty of securing loans. Between 2009 and 2015, a sizeable 6.9 million individuals were denied mortgage loans.
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