The State of Housing in Black America explores recent housing trends in the African American community, including high rates of foreclosures and falling rates of homeownership, the impacts of these trends for current and future generations, and concludes by advocating for improved policies to address the needs of housing in Black America. The report was commissioned by the National Association of Real Estate Brokers (NAREB).
According to the report, African Americans have lost over half of their wealth since the beginning of the recession through falling homeownership rates and loss of jobs. Further, African American homeownership peaked in 2004, indicating that the housing crisis hit this community earlier than the nation as a whole. Since 2007, nearly 8% of African Americans and Latinos have lost their homes to foreclosure compared to 4.5% of non-Hispanic whites at similar income levels. The disparity ratio shows that African Americans are more than 70% more likely to have been foreclosed upon than non-Hispanic whites.
While several indicators point to an improving housing market, there are several challenges on the road to recovery, especially for low income people of color. Attaining mortgage credit outside of the FHA remains difficult for many households, including African Americans and other borrowers of color as well as first-time borrowers. An African American family with the median income ($33,578 based on the 2010 American Community Survey) would need to save for 31 years for a 10% down payment for a house priced at the median. Homeownership rates have continued to fall for African Americans and there are projections that rates will drop to 40% in the near future (down from a high of 50% in 2004).
As new families form and seek housing, and as baby boomers downsize their homes and younger generations are faced with tight mortgage credit markets, the demand for rental housing is growing. Further, demographic shifts such as higher birth rates and immigration among African Americans and Latinos, are adding even more demand on the already tightening rental housing market.
NAREB suggests a broader response to rebuilding the housing finance system. They recommend focusing on borrowers as opposed to focusing entirely on institutions, ensuring adequate credit for rental housing development, and establishing a housing and community infrastructure bank. African Americans have been greatly affected by the housing crisis and the community’s wealth-building potential is at risk. Nevertheless, the African American community continues to grow both in population and purchasing power, highlighting the need for housing policies that will benefit a diverse America.
The full report is available here: http://bit.ly/18sYYO8