Black mortgage borrowers are more likely to make financial sacrifices when buying

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A recent report from Redfin found that black Americans face greater financial barriers to home buying than their white counterparts.

According to a Redfin poll based on more than 1,500 homeowners’ responses, white homeowners were 23% more likely to not make the financial sacrifice to buy their first home, while only 14% of black homeowners could say the same.

“African Americans are much less likely to come from families, communities with strong home ownership,” said Dedrik Asante-Muhammad, head of membership, policy and justice for the National Reinvestment Coalition. “They will get a lot less help from the wealth of generations.”

Whites are more likely to benefit from intergenerational wealth when buying a home, as they are more likely than black borrowers to have parents and grandparents who are homeowners, according to the report.

About 74% of black respondents in the survey said their parents were homeowners, compared with 84% of white respondents. 67% of black respondents had grandparents who were homeowners, compared with 72% of white respondents.

Black home ownership has never exceeded 50% nationwide, and a record 49.7% came in the second quarter of 2004, according to the Census Bureau.

A Redfin survey conducted in the first week of June 2021 found that 21% of black homeowners earned $ 150,000 or more when they bought their first home, compared with 11% of white homeowners, suggesting that black Americans should make more money. than their white counterparts. become homeowners.

“This stuck in my mind because I think it only aggravates the main problem, in my opinion, with regard to black home ownership – it is low welfare and low income in society,” said Asante-Muhammad. “But overall, poverty such as strong assets in the community obviously makes it difficult to get a mortgage.”

Although blatantly racist lending practices were declared illegal under the Fair Housing Act 1968, their legacy persists in the housing sector, contributing to current growing inequalities, according to a report by the Institute of Urbanism. Left unchecked, the proportion of black homeowners will continue to decline for every age group under 85.

The Department of Housing and Urban Development has taken steps to tighten regulations under the Fair Housing Act to provide affordable housing options and avoid housing discrimination.

The report says that the decline in the proportion of homeowners among blacks will be particularly noticeable among black households headed by people between the ages of 45 and 74. If current policies remain the same, the proportion of black homeowners will fall well below that of previous generations of the same age, resulting in an unprecedented number of black tenants over 65.

“I think this all underscores the key issues of black home ownership and why black home ownership has remained largely unchanged since 1970,” Asante-Muhammad said.





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