Black homeownership has fallen to levels not seen since the 1960s, shows a new analysis by The Urban Institute. Many demographic groups faced a decline in homeownership during the housing crisis, but blacks appear to have been the hardest hit.
In the three decades after the Fair Housing Act passed, black homeownership increased by nearly 6 percentage points, reaching 47.3 percent. However, from 2000 to 2015, the rate of black homeownership dropped to 41.2 percent, according to The Urban Institute’s recent research blog post. White and Hispanic homeownership also fell from 2000 to 2015, but by much less; homeownership for Asian Americans rose, on the other hand, in that time period.
Black home buyers purchased homes at the peak of the housing market at higher rates than whites and Asians, the report notes. Many blacks purchased homes using subprime loans, even though they were qualified for prime loans.
The biggest bulk of declines in black homeownership has occurred among younger age groups, those who are 35 to 44 years old. That age group saw a decline of 45 percent in 1990 to 33 percent in 2015, which is just half the level for whites of the same age. Further, among 55- to 64-year-olds homeownership has dropped 8.1 percent among blacks, the report shows.
The Urban Institute calls for reforms in providing more affordable housing, fair credit scoring, and greater access to homeownership to help avoid any further declines in black homeownership.
“The prospects for black homeownership have gone from hopeful to pessimistic in only 15 years,” The Urban Institute notes. “Unless this setback to black homeownership is addressed, black families will rent for more years before homeownership than they did a few years ago. This will shrink the landscape of housing choice available to black families, increase their exposure to displacement, and delay or close off a key wealth-building mechanism. All three of these outcomes will widen the inequality that underlies so many current struggles.”
Source: “Are Gains in Black Homeownership History?” Urban Institute (Feb. 15, 2017) and “Urban Institute Asks ‘What Happened to Black Homeownership?” Mortgage News Daily (Feb. 22, 2017)