Black Homeownership-The Orlando Times
Studies Find Disparities in Black Homeownership
BY JALESSA NEAL, TIMES STAFF WRITER
Photo: Metropolitan areas where Black Americans own the smallest share of homes relative to their overall population. (Source: Lending Tree)
Racial inequality is a major issue that has manifested into economic inequality. For instance, the Black community continues to face significant barriers to homebuying. The Urban Institute and LendingTree both conducted independent studies into homeownership and discovered serious disparities.
“Saving for a down payment, building credit and finding affordable homes are challenges for many Americans, but can be even more so for potential homebuyers in the Black community,” said Rulon Washington, Wells Fargo East Region Market Leader for Mortgage Outreach.
According to Washington, the Urban Institute report warns that if no policy measures are taken to address the significant homeownership gap facing Black individuals and families, homeownership rates will continue to fall further behind, likely pushing more members of the community into renting as they age. The Urban Institute also has done work that finds Black households have the lowest median FICO score among all racial and ethnic groups and the greatest share of households with no credit score at all.
“As a lender, we look to support homeownership in a number of ways, from products to education. For example, our low down-payment mortgage offerings can help potential buyers who are worried about how much they may need to save to buy, and our home mortgage consultants are available to guide buyers through the process,” he added.
In 2017 Wells Fargo created a plan to help increase African American homeownership. It includes $60 billion in purchase lending to create at least 250,000 homeowners over the next 10 years; a focus on increasing the diversity of their sales team including African American Home Mortgage Consultants; and dedicating $15 million toward initiatives that promote homebuyer education and counseling.
As for the LendingTree study, it found that even in areas with large Black populations, Black Americans tend to own a small number of homes relative to their overall population. In fact, in the nation’s 50 largest metro areas, Black Americans make up an average of over 15% of residents but own just 10% of homes. Also, Black residents tend to own the fewest number of homes relative to their overall population in metro areas with larger overall Black populations.
“Owning a home is considered by many as an important step in achieving the American Dream. Americans see homeownership as an investment and as a wealth-building tool across generations,” said Washington, when asked about the importance of homeownership. “Homeowners typically benefit from stable housing costs even as their home fluctuates in value, whereas renters are more susceptible to payment increases as communities evolve, diverting income away from things like investing and long-term saving.”
Potential homebuyers have access to a lot of local resources to understand the homebuying process and where they may stand in the process. Housing counseling is available through a number of local nonprofits, including organizations such as H.E.L.P Community Development Corporation and HANDS of Central Florida.
Down payment assistance programs are also available through state organizations, such as the Florida Housing Finance Corporation, as well as local assistance from the City of Orlando and Orange County.
For more information, the Lending Tree study can be found at: https://www.lendingtree.com/home/mortgage/black-americans-homeownership-trends/ and the Urban Institute study can be found at: https://www.urban.org/urban-wire/2040-us-will-experience-modest-homeownership-declines-black-households-impact-will-be-dramatic