Equal America? Not Without Black Homeownership

Imagine being at the starting line of a race, and everyone else you are competing with gets a head start, leaving you at a disadvantage with a lower chance of winning. That is what the pursuit of a successful life in America looks like for Black Americans.

The struggle continues, and the public eye is watching now more than ever, aware of evident discrepancies between Black and White Americans.

African Americans continue to fight the good fight towards being treated as equals.

With greater amplification, the conversation continues to surround the Black community and its demand for real change at the policy level.

With each act of progression, while we celebrate the move towards a more just society, room to improve remains.

We must focus on categories of racial inconsistencies that are not often considered but have a massive impact on the Black community.

The racial gap towards homeownership, for example, needs to be of primary focus as we close clear gaps between African Americans and White Americans.

The homeownership gap between White and Black Americans is larger today than it was over 50 years ago, and it is imperative to ask why.

Even with further progression, Black homeownership still managed to hit a record low of under 41% before the pandemic.

With the lowest homeownership rate compared to other races, Black Americans are feeling the effects of the pandemic, coupled with the long-lasting effects of the last economic recession. The pandemic in particular leaves housing market experts concerned about a further expanding racial homeownership gap.

The disparity in Black homeownership is believed to be a direct result of years of unfair policies and discrimination, which left Black Americans at a disadvantage fiscally and made it more difficult to acquire property in the future.

Black residents were once dominant in the United States’ metropolitan areas, but longstanding discriminatory policies changed that. Due to gentrification leading to increased housing costs for example, predominantly Black residents were displaced from their homes nationwide.

Subprime lenders are also a part of the disproportion as Black Americans in the early to mid-2000s were 105% more likely to have a high-cost mortgage compared to White Americans.

The significant contrast is largely due to low-interest rates on mortgages that later would increase, making it substantially more difficult for an already disadvantaged group.

The disproportion resulted in a substantial amount of Black families losing their homes during the economic crisis. Between 2007 and 2010, nearly 8% of Black and Latino families lost their homes due to foreclosure, compared to 4.5% of White families.

Like in many major financial decisions, this group is also the most vulnerable, making it easier for the Black community to be preyed upon by lenders. For Black Americans, being the first generation with any chance of owning property is huge but comes at an unfair price for those who commit to loans with increased interest rates.

Multiple factors play a role, and discrimination is by far the largest. With lenders claiming they cannot trust a potential buyer to make their payments, the only loan they qualify for either leaves them paying much more in interest, or they cannot buy the home altogether, ergo the racial homeownership gap.

Definitive policies must be put in place to rectify the homeownership racial gap.

Homeownership is essential for building wealth in the United States. To bridge the racial gaps and progress towards an equal America, we must start with the Black community gaining equal access to homeownership opportunities.

Leah Cohen is a California-based freelance writer. Reach her at [email protected].