Homeownership:
The Cornerstone of the American Dream?
Currently, the nation’s homeownership gap is wider than it was during Jim Crow. This puts additional economic burdens on Black families, as homeownership remains the primary way most Americans build wealth. In response, many leaders believe closing the homeownership gap is a silver bullet for the wealth gap.
The intervention of closing the homeownership gap, while meeting the considerations of the Participation lens, fails to consider:
Availability
There is an historic shortage of affordable homes, with an estimated supply deficit of four to seven million units. Of the homes that are being sold, only 6.9 percent of Black renter households could afford the median-priced home—the lowest point in years. Black families typically earn much less than median incomes, making access to homeownership even more difficult.
Immediate Quality or Value
Home values in majority Black census tracts are 55 percent lower than median home values in white census tracts. Controlling for differences in access to transit, healthcare, and education doesn’t resolve this disparity. Rather, racial bias in the housing appraisal system has cost majority-Black neighborhoods an estimated $235 billion in lost valuation.
Long-Term Returns
Racism in home appraisals, combined with systemic divestment, means that homes in majority- Black neighborhoods do not appreciate in value at the same rate (if at all) as majority- white neighborhoods. The average Black homeowner sees returns 3.7 percentage points lower than the average white homeowner.
