African-American homeownership seems stuck near three-decade lows
Jani Tillery thought she would be a homeowner by now.
Her parents bought a house in the Detroit suburbs in the late 1970s while living on a modest income. Her mother was a teacher. Her father worked in the automotive industry. They raised their children in the house and paid off the mortgage. They will probably live there in retirement and possibly pass the house — not only a home with rich sentimental value but also a sizable financial asset — on to their children.
Tillery, 42, hoped this would finally be the year she, too, could buy. She’s a lawyer at a nonprofit organization in Washington, and she recently got a promotion and raise.
Yet, she says, this part of the American Dream seems out of reach for her, as it is for many other African-American workers despite notable strides in other aspects of their finances.
In many way, AfricanAmericans have regained the ground lost during the financial crisis. Many are finding jobs and getting raises.
But the holy grail of homeownership remains elusive. Forty-three percent of blacks owned homes in 2017, according to an annual report from the Joint Center for Housing Studies of Harvard University. In contrast, 72 percent of whites did, a gap that has mostly widened during the past three decades.
“The overall frustration is, I am a working citizen. I pay my taxes. I’m doing a job to help kids,” said Tillery, whose nonprofit helps children with disabilities. “It’s better for me to own a home. I’m 42. I don’t want to continue renting.”
There aren’t many homes in the area that fall into her price range of $200,000 or less. When she sees a listing she can afford, she either loses out to a buyer who will pay more or waive contingencies or learns that the property isn’t approved for Federal Housing Administration mortgages, which she is relying on because they require lower down payments than conventional loans.
The housing market is recovering nearly a decade after the financial crisis. But a recent increase in the national homeownership rate — the first in more than a decade — has done little to close the stark gap between black and white households. Blacks have also had smaller gains in homeownership since the recession compared with whites, Hispanics and Asians.
The gap persists even as African-Americans have experienced other major financial gains since the downturn. The unemployment rate for black workers dropped to 5.9 percent in May, hitting a record low. African-Americans’ wages have risen as much as the average since 2008. But when it comes to homeownership, one of the pillars of building wealth, black households are worse off than they were 30 years ago.
“We haven’t made any progress in homeownership since the passage of the Fair Housing Act in 1968,” said Nikitra Bailey, vice president with the Center for Responsible Lending, a nonprofit group that researches abusive lending practices. “The little progress we did make has been wiped away by the foreclosure crisis.”
After finding steady jobs and rebuilding their credit after the recession, some African-Americans are having a hard time saving for a down payment. Black workers are more likely than other racial groups to see their paychecks, which are already smaller than those of the average white worker, eaten up by student loan payments and growing rental bills, housing experts say. And when they do feel ready to buy a home, people of color often face higher fees that make the loans unaffordable.
Tillery said saving for a down payment has been difficult because of her nonprofit salary, rent that rises almost every year and her student loan payments. She imagines she would have much more saved if it weren’t for the minimum $400 a month going to her student debt.