A new report revealed that African-American and Latino citizens are facing much higher barriers to achieving home ownership despite other reports suggesting the housing market is on a steady recovery.
The National Urban League and Zillow Inc. jointly authored the research report that indicates that for some Americans financial inequity is a major obstruction to purchasing a home.
The report, “A House Divided: How Race Colors the Path to Homeownership,” takes a detailed look at who owns homes in America, who gets approved for home loans, and how long it takes for certain Americans to save enough to make a down payment.
“It’s been more than 50 years since Dr. King fought for equality, yet it is apparent that the American dream of homeownership is not equally shared by all, even today,” said Dr. Stan Humphries, Zillow’s chief economist. “Our research shows that minority home buyers are encountering difficulties that often aren’t shared by white home buyers, and that even after they achieve the dream, they have been less likely to see a similar return on their investment.”
In other words, home ownership is more likely to remain a dream for many African-American and Latinos, even though these two minority groups make up 12 percent and 17 percent of the nation’s population respectively.
African-Americans only make up 3 percent of the home-buying population and Latinos make up 5 percent.
“It is concerning that families of color remain underserved in our current mortgage system,” said Nikitra Bailey, executive vice-president with the Center for Responsible Lending (CLR). “Owning a home remains an important building block for families to create economic stability. Thus, the primary and secondary mortgage markets have a responsibility to ensure that all Americans who are qualified can access responsible mortgage credit.”
The report also revealed more troubling statistics about today’s housing market.
Black mortgage applicants have the highest loan application denial rate across the board, with 1 in 4 applicants denied. White applicants have only seen a 1 in 10 denial rate.
Also, a whopping 74 percent of whites own their homes, but less than half of Blacks do.
Minorities have a harder time saving up money for down payments. According to the research, it takes Black and Latino families 28 and 17 years respectively to save up to make a 5 percent down payment. If the families want to reach a 10 percent down payment, it typically takes 31 and 26 years.
Zillow Inc. and the National Urban League suggested new ideas that could possibly boost a housing recovery for potential minority home buyers.
The suggestions included establishing and enforcing meaningful affordable housing goals for Fannie Mae and Freddie Mac and Supporting the Consumer Financial Protection Bureau’s efforts to protect consumers from predatory lending practices.