Racial Prejudice and the Wealth Gap Create Barriers to Black Homeownership
WASHINGTON, November 18, 2021 / PRNewswire / – The National Association of Real Estate Brokers (NAREB) today released its 2021 State of Housing in Black America (SHIBA) report. The in-depth study finds that the homeownership gap between black and white families is larger today than in decades when housing discrimination was legal.
According to the U.S. census, in the second quarter of 2021, the homeownership rate for blacks was 44.6% compared to 74.2% for whites, a gap of 29.6%. Incredibly, in 1960, before the civil rights movement and fair housing laws, there was a 27 point gap between black property (38%) and white property (65%).
“The SHIBA Report takes a critical look at the causes of the disparity in homeownership rates among blacks versus whites and recommends initiatives to close the gap,” said Lydia Pope, President of NAREB , noting that over the past 15 years, home ownership among blacks has experienced the steepest decline of any demographic. “Blacks have made little or no progress in closing the homeownership gap. Systemic discriminatory regulations and policies continue to thwart any meaningful effort to increase black homeownership.”
Much of the overt housing discrimination before the Fair Housing Act of 1968 has diminished, but the SHIBA report found that housing discrimination is still flourishing. More subtle forms of racial prejudice have arisen and have become common, such as racial leadership, where real estate agents deliberately steer black homebuyers from white neighborhoods and to neighborhoods with a greater concentration of people of color. Or when black buyers are denied basic information and given fewer housing options than white buyers.
“There are new biased practices that are hindering black homeownership in communities across the country,” Pope said. “For example, housing providers often do not advertise available housing and discriminatory digital marketing has become more common due to the proliferation of social media and online housing advertising. We need new tools to fight this new wave of housing discrimination. ”
The SHIBA Report is a comprehensive analysis of black home ownership, the discriminatory barriers that potential homeowners face, and government programs that have failed to increase black wealth or increase home ownership. property. Here are some important findings from the report:
- The typical white family holds eight times the amount of wealth held by the typical black family, a disparity that translates into an estimate $ 24,100 media net worth for black households compared to $ 188,200 for white families. The pattern of substantial racial wealth disparity has not changed since 2016.
- Homeownership is the most important component of median household wealth, accounting for 67% of the net worth of an average household. Home equity represents on average 70% of the equity of a black household, compared to 59% for a white household, demonstrating the dependence of blacks on home equity for create wealth.
- Several metropolitan areas with growing black populations have homeownership rates well below their national average. In Minneapolis, for example, only 25% of black families own their home, which Minneapolis the metropolitan area of the United States with the lowest black homeownership rate in the country.
- In 2020, black mortgage refusals (16%) more than doubled white refusals (7%), percentages virtually unchanged since 2019.
- Even when blacks have secured mortgages, they face significant challenges in raising equity. Not only are their loans more expensive than those of whites, but their homes appreciate less or are valued less than similar homes in white communities, even after taking housing characteristics into account. A Brookings study shows that homes in black neighborhoods are rated 23% less than similar homes in white neighborhoods. Redfin 2021 study shows homes in the Black neighborhood are undervalued by $ 46,000 on average, a gap that has been constant over the past decade.
Michael K. Frisby