Mortgage

Black owners lose roughly $ 14,000 over the lifetime of a mortgage

Black homeowners lose an average of $ 14,000 over the life of a mortgage and about $ 67,000 in retirement assets due to higher interest rates, according to the eighth annual report of the National Association of Real Estate Agents in Black America.

Analysis of the HMDA data for 2019 found that black borrowers set an average mortgage rate of 4.44% on conventional loans – 15 basis points more than white borrowers. Although not as strong, black consumers paid higher average interest rates than their white counterparts across all credit types.

"The reality is that white homeowners have received very specific benefits over time that are piling up," said David Dworkin, president and CEO of the National Housing Conference, in a NAREB appeal with fair living attorneys this week.

"One of the biggest is the 'Papa Down Payment' loan. If you are a multi-generation homeowner, your family has the wealth and resources to help you with your down payment," added Dworkin. "This is not rocket science or special treatment. That means we have given special treatment, we just want everyone to get it now. "

Several proponents noted that bridging this gap would require government intervention. Otherwise, it will be more the same: in good economic times, incremental bumps in home ownership with no real change and persistent racial differences.

"Let's be absolutely clear as a bell: The federal government in public policy created, supported, and facilitated the racial wealth and home ownership gap in America," said Marc Morial, president and CEO of the National Urban League, on the conference call. "The federal government is an essential element in trying to correct and correct this. What we know from the past 40 years of public policy is that it requires intentionality, not just general policy."

The impact of the coronavirus has had an uneven impact on housing BIPOC communities. The consequences of unemployment from COVID-19 and possible future lockdowns threaten to widen the racial gap even further. These effects can already be observed in certain markets.

"The pandemic showed, if anything, the ugly face of the real economic divide in our country," said Rep. Rashida Tlaib, D-Mich., On the call. "Nearly 13% of my Detroit residents said they had been displaced. That's 88,000 people without a home in a year. Michigan has lost more black home than any other state in the country."

The racial divide in home ownership widened in the third quarter of 2020 as rates fell across all populations, according to the Census Bureau.

The black home ownership rate dropped to 46.4% after hitting a 16-year high of 47% in the second quarter. While it's still a 42.7% improvement over the previous year, black home ownership has never hit 50%.

The total ownership rate in the United States decreased from 67.9% to 67.4% quarterly and increased from 64.8% annually. Following the same pattern, white home ownership rose from 76% in the second quarter to 75.8% and a year ago to 73.4%, Hispanics from 51.4% and 47.8% to 50.9% and all other races from 59.3% and 56% to 58%. .

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