Closing the Gaps: Building Black Wealth through Homeownership

Research Report

Closing the Gaps: Building Black Wealth through Homeownership

November 23, 2020

Abstract

Homeownership is the primary contributor to wealth building for Black households and continues to hold promise for building multigenerational wealth and housing stability for households of color. However, wealth is not accruing equitably to Black homeowners due to a long history of structural barriers and added costs. Households with little to no wealth are far more vulnerable during economic cycles, and the COVID-19 pandemic threatens to widen racial homeownership and wealth gaps creating deep housing insecurity for households of color. This report reviews the critical role housing equity plays in building wealth for Black families, reviews the historical factors that have contributed to disparate outcomes, and explores ways to improve wealth equity through homeownership. The report closes with a discussion of how to promote policies that accelerate wealth accumulation and equity for households of color.

 

This report was corrected on December 2, 2020 and on December 9, 2020. On page 4, we corrected the legend entries in figure 3. On page 6, in the final full sentence, we changed “When buyers could repair these homes” to “When buyers could not repair these homes.” On page 7, in the final paragraph, the median credit score listed for Black borrowers is for 2018, not for 2016, as originally stated. Also, we changed one instance of “Black population” to “Black households.” On page 12, in the first full paragraph, we added the qualifier “most” to refer to Black households who bought homes but did not benefit from price increases. On page 13, in the sentence after figure 9, we changed “Higher credit scores and LTV ratios increase mortgage rates and costs” to “Lower credit scores and higher LTV ratios increase mortgage rates and costs.” On page 18, we adjusted the third sentence of the second full paragraph to be a complete sentence.

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