Black homeownership significantly lags behind Whites despite a 1 percent uptick in the past year, and housing advocates, realtors and lenders stressed Thursday the future looks bleak unless Blacks demand change in the housing structure.
The statistics from the National Association of Real Estate Brokers’ fourth annual “State of Housing in Black America” report released this month offered a glimmer of hope, but panelists at a discussion at the Congressional Black Caucus Foundation’s 47th Annual Legislation Conference at the Walter E. Washington Convention Center in northwest D.C. said the numbers are both a sign of unfair lending practices and a harbinger of things to come.
“We have moved from a system where White folks got mortgages without credit reviews. It was based on their character in the community,” said Nikita Bailey, executive vice president of the Center for Responsible Lending in Durham, North Carolina. “Now that [Blacks] are in the mortgage system, we’re using these scores and sophisticated technology to make determinations about whose eligible and who has access. We’ve got to stop letting the rules change when we show up.”
The Lanham, Maryland-based real estate association presented the discussion with some figures from the report to illustrate its point:
• Black homeownership increased from 41.3 percent in the third quarter of 2016 to 42.3 percent in the first two quarters of this year; the White homeownership rate stands at 72.2 percent;
• Nearly 30 percent of Blacks have been denied loans due to credit history; and
• In 2015, Black applicants were denied at a 17 percent rate for home-purchase loans, compared to 8 percent for Whites.
Panelists echoed the need for policy changes, such as a requirement for lenders to use up-to-date and accurate credit ratings, eliminate predatory lending and enhance education on homeownership.
The report said that 10 cities with the largest Black populations remain segregated that includes Detroit with the highest at 79 percent and D.C. ranked fourth at 47 percent.
The room gasped when James Carr, an urban affairs professor at Wayne State University in Detroit and co-author of the report, said the District’s wealth disparity ratio between Blacks and Whites is 80 to one.
“[In] one of the highest educated Black populations in America, for every dollar a Black person has, a white family has 80 of them,” he said. “Just think about that.”
Rep. Gregory Meeks (D-New York), who hosted the housing dialogue, said he’s a co-sponsor on legislation to ensure financiers thoroughly evaluate and fairly rate a person’s credit.
Housing advocates said some of the benefits in homeownership include tax credits, building equity and forces a person to save money.
Meeks simplified the message: “Own the home, rent the car.”
Besides the minor increase in Black homeowners, the report also notes some improvements such as a Fannie Mae “HomeReady Mortgage” program. For instance, borrowers only need a down payment of up to 3 percent for a home purchase and other financial transactions and required homeownership education.
The report states one in four Blacks live in impoverished neighborhoods.
So NAREB offers a prelude to next year’s study to assess as a policy agenda on these two topics: “the overwhelming lack of access to affordable credit and the need to more effectively manage the large stock of distressed assets in a manner promoting homeownership, particularly in communities historically lacking adequate ownership opportunities.”
To view the full report, go to https://www.nareb.com/site-files/uploads/2017/09/SHIBA2017-final-for-web-0918.pdf.