For the 12th consecutive year, America’s national homeownership rate has declined, according Harvard University’s Joint Center for Housing Studies’ annual report, State of the Nation’s Housing 2017. This year’s report also found these declines vary by race and ethnicity.
As some might expect, the steepest homeownership decline occurred in Black communities, where the percentage of homeowners dropped to 42.2 percent. Among the nation’s largest metro areas, Black homeownership declined the greatest in Atlanta, Baltimore, Dallas and Detroit. By contrast, Latino-American homeownership is higher at 46 percent; but both communities of color severely lag behind the nearly 72 percent rate of White homeownership.
“The ability of most US households to become homeowners,” states the report, “depends on the availability and affordability of financing.”
And therein lies the crux of the problem: access and affordability.
The lack of access to mortgage financing in Black America has a long history rooted in outright discrimination by private actors such as banks, and supported by inequitable federal housing policies that favored White communities, while intentionally disadvantaging Black communities. This discrimination hindered generations of Black families from entering and remaining among America’s middle class. These practices also resulted in lower levels of both Black wealth and homeownership.
Today, applying for a mortgage means a visit to a bank where high incomes, low debt and high credit scores are among the most favored measures for loan application success. Since the foreclosure crisis, according to the JCHS report, the median credit score for an owner-occupied home purchase origination increased from about 700 in 2005 to 732 in 2016.