Black homeownership lower today than national rate during Great Depression
Black homeownership is “endangered,” according to the National Association of Real Estate Brokers (NAREB).
The NAREB says the black homeownership rate is 41.7 percent, which is lower than the national homeownership rate during the Great Depression. The rate is the lowest of any ethnic group in America.
NAREB’s 2016 report titled “The State of Housing in Black America” details how African-Americans continue to be victimized by “discriminatory, unfair and deceptive barriers to credit access.” The organization says the current rate reflects continued mortgage lending disparities, public policies and inactions by governmental institutions.
The home ownership rate for non-hispanic whites is 71.5 percent.
“We as black people are not being afforded the opportunity to participate in the recovery, because we are not being able to recapture what we lost during the downturn,” said to Ron Cooper, President of NAREB. “It was drastic for us, we lost over a trillion dollars worth of equity and wealth and now we’re not given the opportunity to regain that back because of certain policies that prevent the opening of the credit box for all us to own homes.”
In 2016, 68 percent of black applicants for homeownership loans were considered non-conventional loans, which the NAREB says typically lock blacks into a more expensive loan agreement. Right now, the NAREB is pushing policy makers to reconsider the current credit model used to determine credit-worthiness.
Currently, credit card usage is one of the biggest factors when being considered for loan approval. The NAREB considers the practice “old credit technology ” and is calling on lenders to reconsider what the group describes as “outdated and discriminatory” practices. NAREB recommends using factors such as consistent rent payment and utility payment.
The NAREB was formed in 1947, with the purpose of finding solutions that allow blacks to have equal and fair access to homeownership.
“The continued institutional denial of equal access to mortgage credit is the single-most detrimental factor obstructing wealth building among black Americans,” Cooper insists. “NAREB is issuing a clarion call to lawmakers, regulators, government agencies and lenders that a change must and will come. No longer will African-Americans be locked out.”
Ashantai Hathaway is a reporter at theGrio. Keep up with her on Twitter @ashantaih83.