By Tracey Goins
- The national rate of black homeowners is at 41%
- African Americans are at risk to have all median wealth extinguished by 2053
With nearly $200 billion lost in wealth and equity since the Great Recession, African Americans are at risk to have all median wealth extinguished by 2053. In order to change this trajectory, it is important to understand what factors contributed to the wealth disparity among black people. There has been thirty years of progress in homeownership seemingly wiped away by the foreclosure crisis, leaving this community the least likely to acquire real estate.
Why This Matters: Significant losses experienced by African Americans is primarily attributed to the type of mortgage products they had access to. Essentially, this caused higher foreclosure rates because they were disproportionately targeted for subprime mortgages during the housing boom, which by design were associated with less than favorable lending terms. When you couple that with limited savings, it increased the risk of inevitable home loss. There was less regulatory protection of unfair housing policies which was not uncommon in historically underserved communities.
Despite the national rate of black homeowners being at 41%, homeownership in America is highly coveted. It still remains the mark of success and pride within black families and their communities.
Black homeownership can encourage economic development and even effect social justice
Past adverse experiences can still unintentionally project negative connotations onto potential homeowners. Revisiting traditional familial money practices, building meaningful relationships with trusted real estate professionals and self-educating can be powerful and restorative. Black homeownership can encourage economic development and even effect social justice.
Disparities in homeownership rates are cited as the leading cause of racial wealth gaps. Since representation matters in homeownership and is necessary to foster generational wealth, it would stand to reason that more blacks purchasing homes would cause, well more black people to purchase homes.
Situational Awareness: A concerted effort is necessary to identify these discrepancies and cultivate a generation of financially skilled consumers through purposeful education and literacy. This will prove to be invaluable with rising property values and interest rates.
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