Young couple buying a new house
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For Black America, the pursuit of the American dream of home ownership has never waned among adults in this demographic between the ages of 26 and 39, sparking a nationwide surge in the overall rate. US Census data shows this group increased the home ownership rate for all black Americans by more than 2% in the first three quarters of 2020. With nearly $ 200 billion in wealth and equity lost since the Great Recession, African Americans are at risk of wiping out all median wealth by 2053, but this new wave of black millennial homes could change that.
The Breakdown You Need To Know:
CultureBanx noticed that Homeownership is still one of the most important avenues for all Americans to create wealth, as the national black homeowner rate is 41%. Black millennials are striving to increase that number through reduced personal expenses, which have enabled affluent and middle-class black millennials to benefit from record-low mortgage rates in markets where available housing has been relatively scarce. A November analysis by the National Association of Realtors found that 5% of Americans who bought homes were black, 1% more than in 2019.
The National Association of Realtors and the National Association of Real Estate Brokers both stated that first-time black millennial shoppers made the bulk of African American home purchases in 2020 as many left their homes to buy suburban homes. Moving to the suburbs has become increasingly diverse, with 39% of African Americans calling the area home in 2014, according to the Brookings Institute. That's a significant shift from 2000, when only 33% of African Americans lived in the suburbs.
It's important to note that black millennials who bought homes in 2020 are not representative of the bulk of black Americans whose economic situation deteriorated during the pandemic. Some economists worried that, given their disproportionate debt from student loans and other systemic inequalities such as mortgage distortion and redlining, black millennials might even be able to buy houses.
Racial Real Estate Redlining:
In the past 20 years there has been a catastrophic loss of home ownership in key cities with large proportions of black homeowners. In Cleveland, that's 53% black, Baltimore 63% black, and Philadelphia 44% black. Home ownership has declined 11%, 7% and 3%, respectively, according to Brookings. Until 1968, banks could refuse mortgage loans based on a homebuyer's race or neighborhood, and predominantly white communities were able to issue zone restrictions aimed at keeping people of color out of neighborhoods.
Government housing policies such as redlining have enduring effects, from concentrating poverty to suffocating African-American home ownership, and have contributed to widening the racial wealth gap. Even Atlanta Federal Reserve President Raphael Bostic has cited things like the ramifications of long-banned policies, including the fact that the "redlining" of white-neighborhood blacks continues to affect the ability of minority families to amass wealth. Put simply, redlining and other housing policies continue to undermine black wealth accumulation.
What's next:
Low mortgage rates and a new cultural emphasis on wealth creation among African Americans are all factors driving "mortgage-ready" black millennials to buy homes. Those with good credit and steady incomes who are eligible mortgage applicants buy homes in markets where home ownership is often cheaper than renting. Real estate agents and economists assume that the trend towards home buying among Black Millennials will continue into 2021.
source https://seapointrealtors.com/2021/08/12/black-millennials-are-buying-up-the-block-in-home-spending-spree/
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