Before the Pandemic, Homeowners of Color Faced Structural Barriers to the Benefits of Homeownership

Research Report

Before the Pandemic, Homeowners of Color Faced Structural Barriers to the Benefits of Homeownership

Abstract

Heading into this crisis, Black and Hispanic homeowners accrued a smaller financial benefit from homeownership than White homeowners. Homeowners of color typically had lower housing equity, because they purchased homes of lower value with higher mortgage debt later in life. They also had marginally higher costs associated with homeownership, largely due to the greater preponderance of mortgages and slightly higher mortgage rates thanks largely to lower credit scores as well as higher loan-to-value and debt-to-income ratios. The researchers identify lower wages and assets as well as a lack of intergenerational wealth as significant contributors to these differences. They also highlight the historic role of racially discriminatory practices in real estate sales, value-stripping zoning laws, wealth-stripping property laws and violent attacks against communities of color. The researchers offer four proposals to address persistent discriminatory practices and increase the value of homeownership for homeowners of color.

Centers

Cross-Center Initiative

Cross-Center Initiative: 
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