As of January this year, the typical American household has raised over $50,000 in value Millions of buyers bid against each other in a market defined by historic low inventory — a nearly 20% jump from last year. The Sun Belt, which has been a relatively affordable alternative to ultra-expensive coastal markets, was particularly hot, with home value Up to 45% gain in major markets.
While it’s good news for homeowners that their equities continue to rise, millions of Americans trying to buy a home for the first time are looking at that dream further. This is especially true for black Americans, who were hit hardest by the pandemic. job losses, black homeownership rate Less today than it was a decade ago. A big part of the problem is that black Americans generally have lower incomes and fewer assets, making it more difficult to save for a down payment. and they have no credit history and are more likely to be denied a mortgage,
The typical black family has less than a quarter of the wealth of a typical white family – $3 trillion Difference which has increased in the last decade. Housing inequalities – brought about by generations of systemic inequality such as redistribution and unequal credit access – account for about 40% of that gap. black ownership houses About 18% are worth less than white-owned homes.
Combined, all of these factors mean that despite the unprecedented growth in the real estate market, black households are likely to be left behind. And because homeownership is a major driver of generational wealth in America, their children and grandchildren will also likely be left behind.
But there are steps we can take to prevent the wealth gap from widening further:
build, build, build
It’s going to add all kinds of inventory to significantly slow price growth and unlock homeownership for more Americans.
More than 60% of households in the United States single family detached house, many of those neighborhoods are largely built up and put through decades-old zoning restrictions. They tend to skew more white and costly Compared to the wider metro area they are in.
easy zoning rules Allowing even modest densities in single-family neighborhoods would add millions of homes to our blocked housing supply. and this is the majority homeowners — and two-thirds of black householders — should be allowed to agree. Zillow research has shown that allowing an additional unit on only 10% of single-family lots can generate more than $3 million. New Home In just 17 metro areas. This is especially important for house of colorThose who are more likely to live in high-density housing, including condos and townhomes.
credit system improvement
People who have structural access to credit and a strong credit history are more likely to own a home.
Black Americans are more likely than whites to not credit historyAnd those who have marginal, poor or non-existing debt will struggle to get the loan and pay more for it. Most Black, Indigenous and People of Color (BIPOC) communities have a traditional . have very little access to financial Services And there are hunter services, such as payday lenders and pawn shops nearby.
We should create a credit reporting system that takes into account things like regular rental history and utility bill payments (and it doesn’t weigh so much on credit cards, auto loans and mortgages), and under-served communities. Works to provide equitable financial services. fanny mae Recently some have started to take into account rental payment history to give buyers a better chance of qualifying.
down payment assistance
Affording the down payment is a tough hurdle for the homeowner. First-time buyers should expect to spend more than what they have left for a year down payment Compared to what they needed only five years ago. Aid is – in fact, more than 2,000 counties have 10 or more programs Available that offer a grant or loan to help with the down payment and closing costs. But buyers are usually not aware of the help available, and more is needed.
In addition, first-time buyer savings accounts offer a tax-free way for people to save on down payments and closing costs, similar to programs that allow tax-free college savings. Such accounts are now available in some states, but the federal government must take the lead in making them available everywhere.
Prejudice training and safeguards
Everyone should be able to shop and find a home free of prejudice, discrimination and racism. Anyone responsible for real estate license renewal requirements must mandate implicit bias training. That way, industry professionals have the necessary tools to ensure that they are not creating barriers for people to access certain communities or opportunities. Similarly, more states should require impartial lending training that addresses the effects of bias, and lenders should review and update their training to ensure it is addressed. The industry should also adopt remote desktop appraisals that rely on visualization technology, such as 3D-tours and digital floorplans, rather than in-person property visits. it can reduce bias evaluation process So existing BIPOC homeowners can use their equity more equitably, and be protected from discriminatory practices.
No one alive today will see America reach racial housing equality, we will need renewed investment in these and other solutions to prevent the gap widening during this overheated market and set us on the right track to ensure that housing market growth is equitable, Be fair and beneficial. ,