More recently, Black people were disproportionately targeted for the predatory loans that contributed to the housing crash and deep recession that struck in 2008. And with 72% of white families owning their homes, the racial gap there was the narrowest. After fair housing legislation was passed in 1968 during the Civil Rights era, the black homeowership rate increased for 30 years and reached nearly 50 percent in 2004, but all those gains have been erased in the last 12 years. The typical black family had zero wealth in 1968. A striking drop in homeownership for middle-aged black household heads While a house itself can be the inheritance passed on to the next generation, a family can tap a property's equity to fund a child's college education, start a business or give a child or grandchild the down payment to buy a home of their own. Blacks have also had smaller gains in homeownership since the recession compared with whites, Hispanics and Asians. Nearly fifty years ago, on April 4, 1968, Dr. Martin Luther King, Jr., was assassinated. Incredibly, the gap between black and white homeownership rates is wider now than it was in 1900, according to a study released in April by Zillow, an online real estate company. When I made time for it, I found out friendship is here,” Finley said. Veazey found what he was looking for in this majority-black village of grand houses, gated mansions and a world-class golf course: Olympia Fields has a black homeownership rate of 98 percent. Weekly newsletter—our best original reporting and analysis every Monday. These five facts effectively sum up the crisis. "The previous economic expansion benefited Black Americans in terms of wage and job growth, which helped many folks make progress toward homeownership in the last year,'' Marr says. Similarly, the homeownership rate for households with very low incomes was 43.8 percentage points below the rate for high-income households (figure 1). She lost that case, but she ended up buying another home in the same suburb, where they raised their three boys. "One of my agents said that even recently he felt he was denied the opportunity for housing based on his skin color,'' says Prescott. This indicates that all gains for Blacks in homeownership since the passage of the 1968 Fair Housing Act have been lost. "Pocket listings,'' when homes are shown only to those in a broker's private network, also need to be discouraged since they can exclude Black buyers, even if such discrimination is unintentional, Marr says. Now let’s talk about the second part of the paradox, why the U.S. black homeownership rate isn’t any higher today than when the 1968 Fair Housing Act became law. The national white homeownership rate is 71 percent. White flight in the area was amplified by a 2011 tornado that destroyed many homes, he said. You will find a history of active organizing and engaging,” said Lisa Rice, president of the National Fair Housing Alliance. “We wanted to experience the diversity. “Peace is here. The homeownership rate for black households ended 2016 at 41.7 percent, near a 50-year low, according to the U.S. Census Bureau. The most important development since 1968 is that African Americans today are much better educated than they were in 1968. Prince George’s County has the potential to grow into a real competitor with [Washington,] D.C., and Baltimore.”. “When you look at how housing prices have changed over time in black areas as compared to white areas, there’s an inequity that’s really inexplicable,” McCargo said. What those stories likely won’t tell you is the percentage of U.S. blacks who own their own homes today compared to back then. The financial collapse wiped out gains made in the early 2000s. But even though the share of younger African … Daily update — original reporting on state policy, plus the day's five top reads from around the web. The current 30-percentage-point gap between black and white homeownership is larger than it was in 1968, when housing discrimination was legal. Black success in Pleasant Grove is especially striking, since it used to be an all-white, working-class suburb, a “sundown town” where blacks were in danger if they remained after dark, according to James Blacksher, a Birmingham civil rights attorney. Among Black families, 44% owned their own home as of the first quarter of this year compared to 73.7% of white families, according to the U.S. Census. The authors used longitudinal household data from the Panel Study of Income Dynamics for the period 1968 to 2009, with a study sample of 6,994 non-Hispanic whites and 3,158 black homeowners. A civil rights complaint was filed in 2016 against Oakland County, Michigan, home of Lathrup Village, charging that majority-black communities in the county had suffered lower property values because of inadequate economic development. Today the median net worth of white families — $171,000 — is 10 times that of black families. black homeownership rate rose by almost six percentage points. Compared to whites and Asians, a higher percentage of blacks bought homes at the peak of the housing bubble, and many had subprime mortgages, even though they could have qualified for prime loans. African Americans were also displaced when major freeways cut through their communities making "it difficult for Black Minnesotans from the start,'' Prescott says. Nationally, the black homeownership rate is only 41 percent — virtually unchanged from 50 years ago, when the federal Fair Housing Act banned racial discrimination in housing. The rate fell further in the wake of the Great Recession. But some see these relatively small pockets of black affluence as seeds for future success. “Areas with high levels of African-American homeownership generally have very active fair housing and social justice activity. “It was tough at first. Forest Heights, Maryland, also has a black homeownership rate that exceeds 80 percent, though it has been majority black for decades. In 2009, it remained similar to that in some other post-industrial nations with 67.4% of all occupied housing units being occupied by the unit's owner. Black Home Ownership Has Declined To 1968 Rate, When Housing Discrimination Was Legal Black homeownership is as low as it was when housing discrimination was legal, according to a new report by the Urban Institute. Oakwood, Ohio, also was mostly white in 1990, though it was marketed to working-class Cleveland blacks as an alternative to city living as early as the 1920s. Conserving Marine Life in the United States, Ending Overfishing in Northwestern Europe, International Boreal Conservation Campaign, Protecting Coastal Wetlands and Coral Reefs, U.S. Public Lands and Rivers Conservation, marketed to working-class Cleveland blacks as an alternative to city living. New , 9 comments. In 2015, white homeownership rates were about 64 percent. Mountain Settings In … Last week, LendingTree released a report noting that Memphis had the lowest black homeownership rate among the 50 largest cities in the U.S. one of the few places in the country where home values are still below 1990 levels, a study of black home ownership released in February, charging that majority-black communities in the county had suffered lower property values. All rights reserved. "Some of the reasons are due to credit history ... Credit scores can be reformed to include things like rents or utilities that don’t traditionally make it into credit scoring.''. Homeownership is critical to the accumulation of wealth and a factor in the stark difference between the net worth of white families, which was $171,000 in 2016, versus Black families who had a net worth of $17,150 according to Brookings Institution. However, in 2015, black homeownership rates unfortunately mirrored the ones back in 1968. It has been 50 years since the Fair Housing Act was passed, but black homeownership rates have regressed. Figure 3 shows that a larger share of Hispanic (27%), other (27%), and black (25%) populations are 18 to 34, the years leading up to the age of the typical first-time home buyer. But, it also has the highest. Nationally, the black homeownership rate is only 41 percent — virtually unchanged from 50 years ago, when the federal Fair Housing Act banned racial discrimination in housing. Black families experienced a slight uptick in homeownership in the past year, inching up from 41.1% during the first quarter of 2019. It's now 30.3 percentage points, the widest among whites, blacks, Hispanics and Asians – although the difference between white and Hispanic … Lathrup Village, north of Detroit, and Pleasant Grove, Alabama, near Birmingham, were mostly white in 1990 but are now majority black. "Even controlling for income and down payment and neighborhood, minorities are still denied mortgages at a greater rate than whites are,'' he says. You really don’t have time for it if you’re always on guard.”. Many suffered damage to their credit profiles when they were unable to keep up with payments loaded with exorbitant interest rates or lost homes worth less than what they'd paid for them. The national white homeownership rate is 71 percent. The gap in racial equity that persists in many facets of American life impacts home ownership as well. That is the widest gap between Black and white homeowning households in the U.S. Washington, D.C., had the highest level of Black homeownership at 51%. Pew applies a rigorous, analytical approach to improve public policy, inform the public, and invigorate civic life. Age is a key component in the context of homeownership, particularly because of the importance of first-time home buyers, who are typically in their early to mid-thirties. Changes to zoning laws that would allow more affordable townhouses and duplexes to be built alongside single-family homes could help address the ownership gap, Marr says. OLYMPIA FIELDS, Ill. — Two decades ago, Frederick Veazey was drawn to this suburban idyll by the usual things: grass, peace and quiet, good schools. “Home ownership is a great asset to build upon,” said Perry. Between 2000 and 2017, the Black homeownership rate dropped 4.8 percentage points, a loss … © 2021 USA TODAY, a division of Gannett Satellite Information Network, LLC. Race impact throughout facets of life:12 charts show how racial disparities persist across wealth, health, education and beyond, Layoffs hit people of color, young particularly hard:Historic layoffs take biggest toll on Blacks, Latinos, women and the young. Part 2: Black Homeownership 1968 to Today. “Those are the areas we need to focus on. More than half of Olympia Fields residents have a college education, exceeded (among black-majority municipalities) only by its neighbor, Flossmoor, and Lathrup Village in Michigan. The subprime lending debacle dashed the homeownership dreams of many black families in suburbs less affluent than Olympia Fields, said Chris Herbert, managing director of the Joint Center for Housing Studies of Harvard University. The 3 percent drop in the overall homeownership rate reflects changes in the composition of the general population. It's been systematic issues present for a long time that’s made it difficult for Black people to get ahead in Minnesota.''. Incredibly, the gap between black … "Then you look at income and employment,'' he says, ''A Black family makes about half of what a white family makes ... Wages are lower and in turn housing options are lower. But the cost of successful integration and diversity has been stagnant prices: Olympia Fields is one of the few places in the country where home values are still below 1990 levels, according to Federal Housing Finance Agency data. Mar 8, 2021,03:00pm EST. McCargo said even affluent black-majority areas can have a hard time getting businesses, good stores and restaurants, a complaint echoed by Burke and other Olympia Fields residents. Multiple obstacles have hindered the ability of Black Americans to buy property, from the lingering impact of redlining, a practice now outlawed, to continuing income inequality. In fact, black homeownership rates are now at levels similar to those before the passage of the Fair Housing Act in 1968, while rates are up for every other group. The Research Lab's work analyzed 128 U.S. cities with populations of at least 150,000 people and 5,000 black households. With the passage of the 1968 Fair Housing Act, the federal government prohibited housing discrimination on the basis of race. Beauty is here. These are long-standing differences. Olympia Fields is one of the wealthiest and best-educated black-majority municipalities in the country. We didn’t want to be the diversity.”. When she and her husband were trying to move out of Chicago in the 1990s, the group helped the couple sue a home seller in Flossmoor. But that progress is threatened by the coronavirus pandemic which is disproportionately affecting both the physical and financial health of Black Americans. But we were city people and we were tough,” said Finley, who now lives in Olympia Fields. Finley, who heads the League of Black Women in Chicago, said she found inspiration in the natural beauty of the area, including a pond and fountain outside her home office window. "We need people to be aware today that this is something that needs to stop and we need to make change right now because it is a real problem that people can’t ignore any longer.’’, Follow Charisse Jones on Twitter @charissejones. "The mechanism of wealth funnels across all of those different areas,'' says Taylor Marr, Redfin's lead economist. That is no accident: In the 1990s, a group called Diversity, Inc. helped to boost black homeownership in the area by sending black and white buyers to home sellers to ferret out discrimination, and filing lawsuits when they were treated differently. Meanwhile, 76% of white families in Minneapolis own their residences. The blatant discrimination may not be present, but discrimination is still prominent, with subtle racism helping to depress black homeownership rates. The … Minneapolis has been impacted by all of those issues, says Chris Prescott, Redfin's market manager for Minnesota. Why The Black Homeownership Rate Is The Same 50 Years After The Fair Housing Act Became Law. It is one of only two sizeable black-majority cities where median household income is more than $100,000 (the other is Bowie, Maryland). Copyright © 1996-2021 The Pew Charitable Trusts. But in choosing where to raise his sons and daughter, the successful insurance broker also wanted something else. Today’s homeownership rate of 42 percent compares with a national average of 72 percent for non-Hispanic White ownership. Historically, restrictive covenants barred Black residents from buying homes in white neighborhoods, and beyond Minneapolis, still sometimes appear in deeds though they are now illegal. White homeownership rates exceed black homeownership rates in almost all of the counties in the U.S., with few exceptions. Recent homeownership rates show that 73.5 percent of owners are white, while African-American and Hispanic homeownership rates remain below 50 percent. The homeownership among White people in the United States was 73.7 percent, the highest out of all ethnicities, in the first quarter of 2020. 1. In 1900, the gap in the homeownership rate between black and white households was 27.6 percentage points. In the three decades following passage of the Fair Housing Act, the black homeownership rate rose by almost six percentage points. Home ownership rates vary depending on demographic characteristics of households such as ethnicity, race, type of household as well as location and type of settlement. In some other suburban outliers, however, the black homeownership rate of 80 percent or more is less about activism than about the migration of middle-class families — both black and white — out of nearby cities. It outlawed housing discrimination based on race, color, religion, and national origin. Local leaders made a point of welcoming all races to avoid white flight, he said. "However, Black families have been hit harder economically by the coronavirus pandemic and many have lost their jobs which could stall further improvements in homeownership.". Sandra Finley said she was an early beneficiary of Diversity Inc.’s anti-discrimination efforts. “Let me tell you what peace adds to your life — it opens up a whole section of capacity in your brain. Undervalued housing is a problem for majority-black areas, said Alanna McCargo, a policy researcher at the Urban Institute who worked on a study of black home ownership released in February. In relative terms, African Americans today are almost as likely as whites to have completed high school. Don't miss our latest facts, findings, and survey results in The Rundown. In 2017, the Black homeownership rate was the lowest of all racial and ethnic groups at 41.8 percent, about what it was when the Fair Housing Act was passed in 1968. "A number of people held onto the houses they already owned,'' he says. Four other black-majority municipalities with homeownership rates of at least 80 percent — Flossmoor, Lynwood, Matteson and South Holland — also are suburban communities south of Chicago, within a few miles of Olympia Fields. Later after the Gulf War, Iraqis came here too,” Banda said. This story was updated Aug. 27, 2018 to clarify that a civil rights complaint was filed in 2016 against Oakland County, Michigan. But that progress … "That released a cycle of segregation that continued decade after decade even after redlining was suspended by fair housing laws,’’ Marr says. The ownership gap is widest in Minneapolis, a city that has become an epicenter of the nationwide fight for racial justice in the wake of the death of George Floyd, a Black man who died after a white police officer pinned him down with his knee on his neck. In 1987, the national homeownership rate for black households was 45.8 percent, and for white households it was 68.7 percent. … Redlining was a discriminatory practice that prevented Black homebuyers from getting mortgages, restricting them to certain neighborhoods where property values lagged due to bias and a lack of investment. Millennials—those 34 and younger—have the lowest rate at 36.5 percent, though this is a notable bump from Q1 2018, when the rate was 35.3 percent. It is one of only a handful of sizeable, majority-black communities in the United States where the black homeownership rate exceeds 80 percent. “There’s a pool of people who want to buy a house, and that’s what determines its value. 2018 marks the 50-year anniversary of the passing of the Fair Housing Act, and through this period, blacks have yet to see anything resembling parity to white homeownership. Misinformation and the Coronavirus Vaccines, AI Guides Pandemic Response, But Requires Regulation. Black homeownership rates haven’t changed much in the 50 years since the Fair Housing Act. Dr. King’s death marked the end of what is commonly referred to as the mid-20 th century “Civil Rights Movement,” which was marred by inadequate action to reverse the economic discrepancies between Whites and Blacks. Only a quarter of Black families in that city own their home, the lowest rate in the nation among metro areas with more than 1 million people according to census data from 2018, the most recent year available. There’s some strength there,” said Andre Perry, a fellow at the Brookings Institution who is planning a study on how black-majority cities can emerge on the edges of major metropolises. Since the 1980s, federal policies have … Sterling Burke, a retired IBM engineer who is president of Olympia Fields, blames lingering racism among home buyers for the stagnant prices in his community. Black families, 44% owned their own home as of the first quarter of this year compared to 73.7% of white families, white families, which was $171,000 in 2016, versus Black families who had a net worth of $17,150, 12 charts show how racial disparities persist across wealth, health, education and beyond, Historic layoffs take biggest toll on Blacks, Latinos, women and the young, Your California Privacy Rights/Privacy Policy. Prince George’s County, Maryland, home to Forest Heights, may be an advanced example, Perry said, because it includes so many affluent areas that have been majority black for decades. Black residents in Washington, D.C., meanwhile, have likely benefited from property being passed down within families, says Thomas Mathis, a Redfin agent in the district. Table 1. Historically, the relatively low black homeownership rate is largely the result of redlining and other discriminatory lending practices. By Jeff Andrews Mar 13, 2018, 11:30am EDT Getty Images. The homeownership rate of 65.8 percent was 0.7 percentage points higher than the rate in the fourth quarter 2019 (65.1 percent) and 1.6 percentage points lower than the rate in the third quarter 2020 (67.4 percent). The 1968 Fair Housing Act was the last major civil rights legislation of the 1960s and probably the most contentious. Figure 1, on the second tab, shows the gap in homeownership rates between white and black households (white homeownership rate minus the black homeownership rate expressed in percentage points) from the 2012-2016 American Community Survey. And that disparity is even greater depending on the city, according to an analysis of census data by the national real estate brokerage Redfin. These absolute improvements in educational attainment—including substantial increases in both high school and college completion rates—have opened important doors for black workers compared with their counterparts 50 years ago. Black families experienced a slight uptick in homeownership in the past year, inching up from 41.1% during the first quarter of 2019. “A lot of black families are driving long distances to live in these places, but you could build up an infrastructure of jobs, universities and highways and make them a destination in their own right. "That lingers today and limits people's ability to get a loan,'' Marr says. The federal government, along with private companies, also offers good-paying jobs that can make it easier to purchase real estate. But the rate declined by two percentage points between 2000 and 2010, as blacks benefitted less than whites from the post-9/11 economic recovery. The home-ownership rate in the United States is percentage of homes that are owned by their occupants. Alanna McCargo: The black homeownership narrative in America is one that is still in the making, but history tells us that progress has been slow. We are driven by the power of knowledge to solve today's most challenging problems. Americans age 65 and older have the highest homeownership rate at 78 percent. Though the Fair Housing Act, passed in 1968, banned discrimination based on race, religion and gender when selling, renting or financing a home, bias on the part of some sellers, brokers or lenders can still crop up, realtors say. It is one of only a handful of sizeable, majority-black communities in the United States where the black homeownership rate exceeds 80 percent. You subtract those who don’t want to live with black people and the pool is smaller, so that keeps prices down.”. “When Detroit went down the toilet, African-Americans came here for the good schools. Lathrup Village was originally a white middle-class enclave surrounded by the mostly Jewish city of Southfield in suburban Detroit, said Nik Banda, a former Southfield city planner.