On Friday, the American Mortgage Diversity Council [1](AMDC) presented a webinar titled “The State of Housing in Black America,” that addressed the struggles faced by the African-American community in areas of homeownership.
It also explored the level of progress made as well as the steps to ensure equal housing opportunity for all. Providing historical context and how it connects to the current issues at hand, Charmaine Brown, Director, External Outreach and Engagement, Office of Minority and Women Inclusion at Fannie Mae, recalled the first 250 Years in America, wherein African-Americans had no property rights, and were locked out of the American Dream of homeownership, until the Fair Housing Act came in to being in April 1968. In her presentation, she also elucidated on what the data says about African-American homeownership.
"As we kick off our celebration of 400 years of African American history, I can think of no better topic to begin than to discuss the current state of homeownership and potential solutions for improvement. I'd like to thank Charmaine Brown for her thought-provoking presentation," said Derek Templeton, Executive Director & Associate General Counsel at Five Star Institute.
Brown pointed out that "African-American homeownership rates are the same as it used to be in 1968, whereas the number of incarcerations in the community as well as the wealth gap between black and white families tripled between 1968-2016." Currently, the homeownership rate among African-Americans is the lowest of all racial groups at 41.8 percent, lagging consistently behind white homeownership rate.
African-Americans have been the slowest to recover from the housing crisis; with their homeownership rate at nearly 6 percentage points lower than in 2010. “While Hispanics and other ethnic groups experienced an increase in homeownership, African-American homeownership rate dropped by 4.8 percentage points between 2000-2017. So, while others are moving forward, African-Americans are moving in the other direction,” Brown said.
Interestingly, the younger demographic have seen a greater decline in homeownership in the community. Moreover, the net worth of African-Americans significantly lags the net worth of other groups. Homeownership is seen as one of the primary means of wealth creation, however, African-American homeownership has not recovered from the aftermath of the 2007 financial crisis.
Pointing out to generational implications, Brown addressed wealth and homeownership transfers from parents. She also touched on the effects of predatory lending during the housing boom, wherein African-American and Hispanic communities were primary targets of highly exploitative practices, which further exacerbated the situation. African-Americans were more likely to be given subprime products during this period, which led to a significantly higher foreclosure rate between 2007-2009.
The webinar also explored ways to diversify the appraisal industry through homebuyer education, community partnerships, strategic alliances, and financial literacy.
Click here [2] to view the webinar.