Homeownership is a great way to build and maintain wealth. However, a study conducted by the National Association of Realtors highlights the racial and socioeconomic inequalities that make the American dream more challenging for Black Americans to achieve.
The association studied wealth in homeownership over a period of ten years. According to their findings, homeowners within a higher income bracket saw greater home value appreciations when compared to homeowners in a lower income bracket.
This disparity in income disproportionately affects Black homeowners. According to a Hamilton Project analysis, Black households earned $24,100 in wealth compared to their white counterparts who earned $188,200. This is largely due to the decades of discriminatory housing policies that prevented Black families from accumulating wealth through homeownership.
Racial Disparities in Property Values
Homeownership can be an effective way to save money and create financial stability. As home values increase, homeowners can access new levels of equity that can be used for investments, paying off debt or enjoying a more comfortable lifestyle. However, for Black American homeowners, obtaining wealth is much more challenging, due to the specific barriers that they face.
When it comes to property values, residences owned by Black homeowners often have the lowest valuation in comparison to other racial groups. The NAR study revealed that homes owned by Black homeowners are approximately $64,000 cheaper than homes owned by white Americans.
The data also shows Hispanic homeowners experienced a higher rate of home value appreciation compared to White homeowners. Asian households were found to own the priciest homes out of all ethnic groups. Regardless of income, homeowners in costly cities, such as San Jose, gained the most in terms of accumulating wealth. This is due to the significant appreciation of home prices at up to $836,490 in wealth.
On Fighting Injustice
In order to dismantle the obstacles obstructing Black homeownership, policymakers should champion measures that promote fairness in housing. This includes increasing access to affordable housing, funding financial literacy programs and eliminating predatory lending practices.
Black homeowners and their allies can help remedy discriminatory practices by remaining abreast of the systemic inequities in housing with the goal of taking action. By directly addressing biased policies and behaviors, the country can cultivate a housing market of fairness and justice, regardless of race or background.
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by Arielle Clay | January 19, 2023
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