Despite record low unemployment and higher wages than in the past, substantial barriers to homeownership continue to keep black Americans from amassing wealth.
A new Washington Post report collects recent studies and data on black homeownership that offers a stark view of the racial gap in housing—one that only seems to be getting worse.
Citing a Harvard study, the Post reports homeownership rates among African Americans in 2017 were among the lowest they’ve been since passage of the 1968 Fair Housing Act. The number reflects stagnant rates in black homeownership, which grew just 0.3 percent between 1994 and 2016, even as other groups—whites, Asians, and non-black Latinos—saw more substantial gains.
At 43 percent, African American homeownership lagged far behind the rate for all Americans in 2017, which was 63.9 percent (if you look at just white homeowners, that rate rises to 72.9 percent—meaning nearly 3/4 of all white people own a home, versus less than half of black Americans). Non-black Hispanic homeownership reached 46.2 percent in the same year.
The numbers reflect an overall slide in homeownership among African Americans that has been happening since 2004, where homeownership rates peaked across the U.S.
Among the causes outlined by the Post are the lingering effects of the 2007 financial crisis, which disproportionately devastated black homeowners. Black home buyers were targets for the predatory subprime lending which drove the housing crisis, and lost their homes to foreclosure at nearly twice the rate of white homeowners, according to data the article cites from the Center for Responsible Lending.
There are other systemic issues, as the Post points out: a lack of affordable housing, low inventory in areas where African Americans are seeking homes, and student debt—another issue that has had an outsize effect on black graduates.
Then, there is real estate discrimination—one study quoted in the article found 1 in 5 black applicants were denied conventional home loans, compared to just 7.9 percent of white people. Following that pattern, 39 percent of black homeowners found their applications rejected; this was true of 22.9 percent of white applicants.
And while wealth disparities—of which, again, black Americans lag far behind their non-black counterparts—could account for lower credit scores and other factors that would make it more difficult to purchase a home, some experts say bias plays an important role in keeping black homeownership rates low.
Executive Director of the National Association of Real Estate Brokers (NAREB) Antoine Thompson told the Post in some cases, “even when blacks have higher credit scores, they were often offered worse financing terms than less qualified whites.
“It’s hard to argue that bias isn’t a factor,” Thompson said.
The article comes as there’s a national push to discuss race-based economic policy in the Democratic party. Several candidates, including Senators Elizabeth Warren (M.A.) and Kamala Harris (C.A.) and former Housing and Urban Development Secretary Julián Castro have come out in favor of reparations for African Americans. While Castro has had more specifics to offer than his peers—he supports starting a task force to make recommendations on how such a policy would be implemented—Harris appeared to walk her reparations comments back in a recent interview with the Grio.
In conversation with the Grio’s Editor-in-Chief Natasha Alford, Harris said she supports the Lift Act, which would provide a tax credit for families making up to $100,000.
While the policy is not directed at black families specifically, Harris told Alford, “if you look at the reality of who will benefit from certain policies, when you take into account that they are not starting on equal footing, it will directly benefit black children, black families, black homeowners because the disparities are so significant.”
“I’m not gonna sit here and say I’m going to do something that only benefits black people. No. because whatever benefits that black family will benefit that community and society as a whole and the country,” the senator continued.
But Historian Richard Rothstein, a housing policy expert at the Economic Policy Institute, told the Post that government policy should explicitly address the racial gap in order to reverse more than a hundred years of codified segregation and discriminatory policies in housing.
“Because of the long-term effects of racially explicit government housing policies, where for decades blacks were excluded from buying homes in some areas, we need equally explicit government policies to remedy the imbalance,” Rothstein told the paper. “There is no way this can be fixed by market forces alone.”