Overall, overt discrimination in housing has decreased over the years as a result of regulations guided by Fair Housing Laws; however, it is far from completely dispelled. And while some may not be able to identify it in their day-to-day lives, the diversity gap in homeownership is a clear example of the lingering challenges that need to be addressed, as discussed by l ‘National Association of Real Estate Brokers (NAREB) 2021 State of Housing in Black America (SHIBA) report.
In fact, the study found that the homeownership gap between black and white families is larger today than 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, leaving a gap of 29.6%. In 1960, before the civil rights movement and fair housing laws, the gap fell below this threshold to 27 points between black property (38%) and white property (65%).
Several large metropolitan areas lag behind in black homeownership rates, with Minneapolis reporting a 25% share of black families owning their own homes, the lowest rate in the United States. United.
“The SHIBA report takes a critical look at the causes of the disparity in homeownership rates of blacks versus whites and recommends initiatives to close the gap,” said Lydia Pope, president of NAREB, for the report, adding that over the past 15 years, homeownership among blacks has experienced the largest decline of any demographic.
Racial prejudice has infiltrated the housing, informing practices that are now more subtly discriminatory, such as racial leadership, “where realtors deliberately drive black homebuyers away from white neighborhoods and into neighborhoods with greater concentration. people of color, âthe report said.
âThere are new biased practices that are hindering black homeownership in communities across the country,â Pope said. âFor 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 analyzes these discriminatory barriers to homeownership, as well as government programs that have failed to increase black wealth or close the diversity gap.
The typical white family has eight times the wealth of the typical black family, totaling an estimated median net worth of $ 24,100 for black households compared to $ 188,200 for white families.
Although homeownership is the most important component of median household wealth (it represents 67% of an average household’s equity), home equity plays a larger role for black households. , representing on average 70% of the net worth compared to 59% for a white household.
Discriminatory practices flourish in more than one area, also affecting lending space and giving some an unfair advantage. According to the report, in 2020, black mortgage refusals (16%) more than doubled white refusals (7%) – and those numbers haven’t changed much since 2019.
And when it comes to building wealth through equity, progress has been slower for blacks who have secured mortgages, as their homes have appreciated less or are valued less than similar homes in white communities. In fact, a study by Brookings showed that homes in black neighborhoods were rated 23% less than similar homes in white neighborhoods.
âBlacks have made little, if any, progress in closing the homeownership gap,â Pope said. âSystemic discriminatory regulations and policies continue to thwart any meaningful effort to increase black home ownership. “
To read the full report, Click here.