Wealth building experts normally say home ownership is a major tool to build wealth, and it’s often encouraged within the Black community as such. But it seems that now even Black home ownership is endangered as a primary wealth building tool.
A study released from Johns Hopkins University found that Blacks were much more likely than their white peers to still suffer a severe a drop in their net worth despite home ownership. And without the opportunity to buy homes, it will be harder for the Black community to build wealth.
This issue was the topic of discussion at the National Association of Real Estate Brokers (NAREB) Issues Forum during the Congressional Black Caucus Foundation’s 46th Annual Legislative Conference. And experts warned that mortgage lending disparities along with public policies and “inactions by governmental institutions conspire to impede the growth of Black homeownership.”
The facts are indisputable. According to the NAREB’s 2016 report, the State of Housing in Black America (SHIBA), the current home ownership rate for Blacks was a mere 41.7 percent. This is lower than the national home ownership rate during the Great Depression of the 1930s–yes, that Great Depression. Yet by comparison, the 2016 home ownership rate for non-Hispanic whites is a lot higher at 71.5 percent.
This low is due in lager part to the inability of Blacks to get loans for home buying. And the NAREB wants to take action. Explained Ron Cooper, president of NAREB, “The continued institutional denial of equal access to mortgage credit is the single-most detrimental factor obstructing wealth building among Black Americans. NAREB is issuing a clarion call to lawmakers, regulators, government agencies and lenders that a change must and will come. No longer will Black Americans be locked out.”
Unfortunately, it will require just as much work to close the wage gap that could eventually eliminate the home ownership gap. As CNN recently reported, “The racial wealth gap in the United States has been consistently wide for decades. Median wealth for white families hovers at about $134,000, compared to blacks at approximately $11,000 and Hispanics at around $13,900. Blacks also tend to earn less than whites.”
Is home ownership still a wealth-building priority for you?