We might by July say it was over, but the Blacks and Latinos might be still dealing with the worst aspects of it in 2021, 2022 and 2023. We think it's pretty clear it's disproportionately hurting Black entrepreneurs and that could have a serious effect on homeownership. Between 1994 and 2019, the white homeownership rate increased by approximately 3.3%, while the Black homeownership rate declined by 0.2% over the time period. It does point to the fact that if you want radical increases [in Black homeownership] it’s going to require some type of strong government subsidies to do this. They spoke about the factors that have contributed to the lower rates of homeownership among Black Americans and what policies could address them. The homeownership rate, as well as its change over time, has varied significantly by race. 38 Eligible homebuyers can also obtain assistance with down payment and closing costs through the HOME Investment Partnerships (HOME) and Community Development Block Grant (CDBG) programs. The U.S. housing market is splitting along racial lines, with black homeownership dropping to the lowest level since at least 1970 -- just two years after the Fair Housing Act was passed. The NLSY79 is a nationally representative sample of 12,686 men and women born from 1957 to 1964 and living in the United States at the time of the initial survey. The black homeownership rate is lower today than in 1968 when the Fair Housing Act was signed into law by President Lyndon Johnson. MarketWatch: How did you all come up with the 60% target for Black homeownership? As part of the Value Gap (link) interview series, MarketWatch spoke with Dedrick Asante-Muhammad, chief of race, wealth and community at the National Community Reinvestment Coalition, and Joshua Devine, the organization's director of racial economic equality. And over the past year, matters have gotten worse for Black Americans. MarketWatch: In the report, you addressed the role that lending practices and getting access to mortgage credit should play in advancing Black homeownership. Devine: We felt like 60% was measurable, reasonable, and we could really have some policy and pragmatic solutions around it. Why that number? Because in cities usually there’s greater racial income inequality than outside of the city. There has never been a time in America’s history where a majority of Black Americans were homeowners. As a result, Black people are at higher risk of chronic health conditions, and are, according to the Centers for Disease Control, at increased risk of getting COVID-19 or experiencing severe illness. The United States has, for better or worse, increased the overall homeownership rate significantly from the turn of the 20th century. Is your income just over the threshold for the $1,400 stimulus check? ”. When you talk about the system of money there are a number of opportunities where communities and institutions can galvanize and redirect money to support a common goal. Asante-Muhammad: If we do want to address homeownership, we have to address the overall economic conditions of African-American people and bridge this income and wealth inequality. Black homeownership hasn’t been this low since the time when housing discrimination was legal. 'Oftentimes, Blacks and Latinos hit the worst of a crisis after the crisis is supposedly over'. Oftentimes Blacks and Latinos hit the worst of a crisis after the crisis is supposedly over -- we had the worst of the Great Recession a couple years after the Great Recession was already declared over. Research has shown that layoffs amid the COVID-19 pandemic were more likely to cause housing instability among Black and Latino workers than among white workers. What steps do lenders and other financial institutions need to take? ”. So how can we use these funds to actually do long term financial stability versus patchwork — which is really what the multi-trillion dollar bailouts of the last year have been. But oftentimes there aren’t really good lending products out there. The Value Gap (link) is a MarketWatch Q&A series with business leaders, academics, policymakers and activists on how to reduce racial and social inequalities. We’re at a time where every three months we have another near $2 trillion bailout, so clearly there are funds available there. “ So now we have a segregated society by wealth and by income, which is reinforcing what was the outright Jim Crow segregation of the past. Why is that? They spoke about the factors that have contributed to the lower rates of homeownership among Black Americans and what policies could address them. If we’re trying to do affordable homes, we have to — whether through government subsidy or mandate — ensure that there are these mortgages, and there are these renovations for homes where there are much tighter margins. It took radical transformation of mortgages and strong government subsidies to move whites into majority homeownership status in the ‘40s and ‘50s — we’re going to need something like that again. So, what we hope to do in this report is to really hold, for example, financial institutions and mortgage lenders accountable to how many loans they provide to Black Americans, to reconsider their products, to be more accessible to Black Americans. Owning a home is one of the main drivers of wealth in this country, particularly across generations, which makes increasing Black homeownership a critical goal in addressing the overarching racial wealth gap. That goal of increasing Black homeownership actually benefits not just Black homeowners or Black Americans but broadly the entire community and global economy. MarketWatch: It’s not just become more difficult for Black Americans to become homeowners, but also for Black Americans to keep their homes. Asante-Muhammad: Trump was going the wrong direction. The rate rose from 41.9% in 1995 to 49.4% in 2004, an increase of 7.5 percentage points. And with that oftentimes housing can be more expensive, so that can be a challenge. And Obama was going in the right direction radically too slow, because we weren’t having a boom in homeownership during the Obama years. Over time… In the second quarter of 2019, the Black homeownership rate dropped to 40. I think that could also be true with the COVID recession. So obviously when they fall into negative economic situations they have less to fall back upon, which can make them lose a home that much faster. Things you need to know What the data measures. (The interview has been edited for style and space.). So obviously when they fall into negative economic situations they have less to fall back upon, which can make them lose a home that much faster. Even to get to something that's far distant from white homeownership rates requires a tripling of new Black homeowners every year for 20 years. How significant is that? ‘That goal of increasing Black homeownership actually benefits not just Black homeowners or Black Americans but broadly the entire community and global economy.’ Between 2000 and 2017, the Black homeownership rate dropped 4.8 percentage points, a loss of about 770,000 Black homeowners, while the homeownership rates of other racial and ethnic groups either remained constant or increased. Asante-Muhammad: African Americans really haven’t hit a 50% homeownership rate. There has been, over the last 20 years, less and less affordable homes. Asante-Muhammad: We don’t know the effects of what I’ll call the COVID-recession yet — we’re still trying to figure that out. Research has shown that layoffs amid the COVID-19 pandemic were more likely to cause housing instability among Black and Latino workers than among white workers. What we hope to also do in our report is to think about this in a more geographic context. Until there are substantial increases in wealth and income, it's going to be hard to see any changes in homeownership. Some analysts expect the $1.9 trillion COVID package to boost inflation, which in turn would lead to higher mortgage rates. ‘There aren’t really good lending products out there. “ Whites have had the highest homeownership rate, followed by Asians and Native Americans. There has never been a time in America's history where a majority of Black Americans were homeowners. Statista Logo statista.com Source: Urban Institute The homeownership rate of black millennials stands at 13 percent compared to 37 percent for white millennials. This 31.2 percentage point difference was the largest gap since the Census’ time series began in 1994. The Economic Policy Institute notes that without homeownership, among other things, black wealth has suffered. In the second quarter of 2019, the Black homeownership rate dropped to 40.6% (link), down seven percentage points from roughly a decade earlier. households in the Black African (20%) and Arab (17%) ethnic groups had the lowest rates of home ownership; in every, socio-economic group and age group, White British households were more likely to own their own homes than all ethnic minority households combined; 2. We’ll see what happens over the next year or two. For more than 100 years, a racial homeownership gap ranging between 20 and 30 percentage points has existed between Black and white Americans. Devine: There are already a number of Black Americans who are not financially stable, and there are reports that suggest that many of them didn't even have enough savings or financial safety net to weather an economic disruption like COVID. Oftentimes Blacks and Latinos hit the worst of a crisis after the crisis is supposedly over — we had the worst of the Great Recession a couple years after the Great Recession was already declared over. Privacy Policy and We'll see what happens over the next year or two. MarketWatch: How did you all come up with the 60% target for Black homeownership? People of color were far more likely than their white peers to face challenges making their monthly rent payments throughout the coronavirus emergency. The median income for Black households is like $44,000. Terms and Conditions Privacy Center Disclosures Member User Agreement Corrections Cookies Accessibility. MarketWatch: In the report, you addressed the role that lending practices and getting access to mortgage credit should play in advancing Black homeownership. The hope is that renters can make the transition to homeownership over time. I’ve had bankers tell me they’ve had a hard time finding a mortgage for a $70,000 property.’ your username. Increasing homeownership in the black communities over five years; Increasing the size and scope of black business in real-estate; Strengthening the foundation of black wealth through land ownership; Raising the awareness of the important role homeownership plays in wealth creation in the black … Graph and download economic data for Homeownership Rate for the United States: Black or African American Alone (BOAAAHORUSQ156N) from Q1 1994 to Q4 2020 about homeownership, African-American, rate, and USA. And that’ll make homeownership open up. It now hovers closer to 44%, while the white ownership rate is far higher (approximately 74%). Devine: We felt like 60% was measurable, reasonable, and we could really have some policy and pragmatic solutions around it. Is that the Deep South? Interviews for the NLSY79 were conducted annually through 1994 and biennially since 1994. ”. But what’s concerning is that we’ve seen Black homeownership pretty much decreasing since 2000, and between 2015 and 2019, as the report notes, we have kind of been stagnant at around 42%. So not only has the financial insecurity of Black Americans hindered their progress towards buying a home, now it's even worse. Until there are substantial increases in wealth and income, it’s going to be hard to see any changes in homeownership. ”. In the second quarter of 2019, the Black homeownership rate dropped to … There has never been a time in America's history where a majority of Black Americans were homeowners. So we wanted to have a goal that would not just get us over the edge of being majority homeowners, but would kind of get you to a level where you’re firmly at the space of being majority homeowners. “ There has never been a time in America’s history where a majority of Black Americans were homeowners. The Value Gap is a MarketWatch Q&A series with business leaders, academics, policymakers and activists on how to reduce racial and social inequalities. So, where do we feel like lending investments should be made across the country to serve this critical mass? The homes that are being constructed are more and more high-cost homes, and so that must also be an ongoing barrier for Blacks, Latinos, for those who are moderate-income, low wealth to enter into this 21st century housing market. MarketWatch: Do you see reparations playing a role in advancing Black homeownership? So, [these] mortgage products, they have to hit the majority of African Americans and Latinos. What steps do lenders and other financial institutions need to take? The most recent data available were collected in 2010 when the respondents were ages 45 to 53. People of color were far more likely than their white peers to face challenges making their monthly rent payments throughout the coronavirus emergency. COVID-related layoffs were more likely to cause housing instability among Black and Latino workers than among white workers. And usually during economic crises Blacks are more likely to lose their job and lose it for longer periods of time. Asante-Muhammad: If we do want to address homeownership, we have to address the overall economic conditions of African-American people and bridge this income and wealth inequality. It now hovers closer to 44%, while the white ownership rate is far higher (approximately 74%). Just like it took radical transformation of mortgages and strong government subsidies to move whites into majority homeownership status in the '40s and '50s -- we're going to need something like that again. Participants in the NLSY79 were first interviewed in 1979 when they were ages 14 to 22. Owning a home is one of the main drivers of wealth in this country, particularly across generations, which makes increasing Black homeownership a critical goal in addressing the overarching racial wealth gap. We had the worst of the Great Recession a couple years after the Great Recession was already declared over.’ That could be a part of reparations. Jacob Passy is a personal-finance reporter for MarketWatch and is based in New York. How can we get to 60% even quicker? “ That’s something that we hope to figure out as we move along. Black homeownership is in crisis. I think some type of mass investment in homeownership can really strengthen African Americans and neighborhoods in general for decades to come. Asante-Muhammad: You do need to look at where the Black population is growing and where the opportunities to hit that market are. We might by July say it was over, but the Blacks and Latinos might be still dealing with the worst aspects of it in 2021, 2022 and 2023. The homeownership among White people in the United States was 73.7 percent, the highest out of all ethnicities, in the first quarter of 2020. MarketWatch: Even before the pandemic, Black homeownership was falling — and has been falling for over a decade, dropping to the lowest levels since the Civil Rights Act was signed. When you talk about the system of money there are a number of opportunities where communities and institutions can galvanize and redirect money to support a common goal. Tax preparers have tips to help you qualify, ‘No peace’ for markets until 10-year Treasury yield hits 2%, strategist says, ‘The Covid 15?’ If only — this is how much weight the average person actually gained during the pandemic, What the democratization of private aviation means for investors. This at once represents discrimination in the market and the lack of access to credit. The homeownership rate for black households ended 2016 at 41.7 percent, near a 50-year low, according to the U.S. Census Bureau. Black Homeownership Matters aims to shed light on discriminatory … We will also have to understand that recovery has to center and respond to the decades of financial insecurity that Black Americans have faced pre-COVID, and you need to think about solutions to those issues. "First-time buyers often lack cash to pay the down payment and closing costs charged by conventional lenders and would otherwise have to defer homeownership for many years," Szymanoski says. And so if you had a strong economy, which you did in the 1960s, that would allow for some Black homeownership to be maintained. MarketWatch photo illustration/iStockphoto, — Dedrick Asante-Muhammad, chief of race, wealth and community at the National Community Reinvestment Coalition, — Joshua Devine, the National Community Reinvestment Coalition’s director of racial economic equality, new report from the National Community Reinvestment Coalition, Mortgage rates keep increasing — and the $1.9 trillion pandemic relief bill could push them even higher, What to do if you already filed taxes but want to claim the $10,200 unemployment tax break, Fewer people take a ‘wait and see’ approach to COVID-19 vaccine — here’s what changed their minds. Just like it took radical transformation of mortgages and strong government subsidies to move whites into majority homeownership status in the ‘40s and ‘50s — we’re going to need something like that again. Is that the Atlanta market, for example? MarketWatch: Do you see reparations playing a role in advancing Black homeownership? Home Ownership Rate in the United States averaged 65.25 percent from 1965 until 2020, reaching an all time high of 69.20 percent in the second quarter of 2004 and a record low of 62.90 percent in the second quarter of 1965. Welcome! But what you have to remember though is that, yes, there were a lot of barriers for Blacks to buy homes in white neighborhoods, but there weren’t as many barriers for Blacks to buy homes in Black neighborhoods. As part of the Value Gap interview series, MarketWatch spoke with Dedrick Asante-Muhammad, chief of race, wealth and community at the National Community Reinvestment Coalition, and Joshua Devine, the organization’s director of racial economic equality. The median wealth of a black … Why that number? What we've been dealing with since the 1980s is a regressive economy where Blacks never saw the economic rewards that people were hoping would go with a post-segregation society. GettyThere has never been a time in America’s history where a majority of Black Americans were homeowners. "Debating over whether you should lease a luxury car or buy a more economical vehicle? MarketWatch: Even before the pandemic, Black homeownership was falling (link) -- and has been falling for over a decade, dropping to the lowest levels since the Civil Rights Act was signed. A targeted approach like reparations is something that probably will need to occur, meaning we can have some changes in different types of mortgages but if there aren’t changes in the Black economy as a whole it’s going to be hard to move things forward. Oftentimes, Blacks and Latinos hit the worst of a crisis after the crisis is supposedly over. Terms of Service apply. We're hoping we're getting past the worst of the COVID crisis. Devine: When folks use the term reparations, it’s really to denote the need to make bolder systemic interventions to support housing access or housing equity for Black Americans, but also for Black Americans to generate wealth.