My husband and I focused on this concept of building intergenerational wealth through home ownership months ago thanks to a real estate course, but we started our journey to accomplish what the Washington Post reported:broken for many black families ”was not easy. We are not rich. Our parents worked for whatever they have, and neither of us had trust funds or nest egg to buy property. That means my husband and I, like the generations before us, had to work and save in order to be able to pay a down payment only to be excluded from our market.
In Chicago, where I'm from, the home ownership rate among blacks was 40% in 2018 compared to 75% among white Chicagoans in a study by Real estate brokerage from Redfin. In Atlanta, the difference was 47% for blacks versus 75% for their white counterparts. In Charlotte, North Carolina, where Crystal Marie and Eskias McDaniels were hoping to make the American dream come true, the home ownership rate was 44% for blacks and 75% for whites. The McDaniels, a black couple, told the journalistic nonprofit The Markup that despite excellent credit and stable jobs, they had no access to a mortgage, but Crystal Marie's white employees had received mortgages. "I think it would be really naive for someone like me not to think that the race played a role in that," she said.
The markup stated that Crystal Marie's claim in 2019 was true: lenders were more likely to refuse mortgages to people of color than similarly positioned whites, the nonprofit reported. "In a complex statistical analysis of more than 2 million traditional home purchase mortgage applications, we held 17 different factors constant and found that lenders were 40% more likely to turn down Latino loan applicants and 50% more likely to turn down Asian / Pacific applicants – Islands reject and 70% more likely to reject Indigenous American applicants than similar white applicants, ”journalists say Emmanuel Martinez and Lauren Kirchner wrote. “Lenders were 80% more likely to reject black applicants than similar white applicants. These are national tariffs. "
The journalists found that an algorithm developed in the 1990s and used by both Freddie Mac and Fannie Mae contributed to the inequality and rewards forms of credit that white people have better access to and that other factors such as punctual rent and. utility bills are not taken into account. “This is how structural racism works,” Chi Chi Wu, attorney at the National Consumer Law Center, told The Markup. "This is how racism is embedded in institutions, guidelines and practices without any animus."
For the black families who have weathered the odds and bought homes – families like the McDaniels who pushed back initial rejection and were eventually approved – these purchases have the power to change the financial development of their entire family. Mary Pherribo, a widowed housekeeper and daughter of former slaves, was inspired when she learned that her late husband's grandfather bought 50 acres and left a home for each of his eight children, Pherribo's great-granddaughter Tai Christensen told the Washington Post. Pherribo, in turn, saved $ 500 and bought a house of her own in 1936 when she was 35 years old. "The courage it took to make that decision was incredible," Christensen told the Post. “It is proof that you can change the entire line of your family's history. My father and uncle own several properties, and pretty much everyone in my family owns a house and went to college because of their choice. "
I hope my kids can say the same thing one day. When I started learning about home ownership a year ago, I couldn't predict how badly I would be seen – not in the eyes of lenders, but of sellers who prioritize cash-only offers. Of the three metropolitan Atlanta brokers I contacted, none were recommended, t. to useFunding from the Federal Housing Administration, or FHA loan for short. Otherwise ideal for first time home buyers who may not be able to access large sums of money for a down payment, the FHA loan requires a 3.5% reduction, has to pay closing costs by sellers, and does not allow buyers to pay more than a property is valued. Many sellers in the sought-after metropolitan areas of Atlanta are not even looking at offers related to FHA funding. They expect buyers to be able to fill in valuation gaps, which means they'll pay more than the property is worth. They expect multiple offers, including some bar deals, and for the most part, they are getting what they expect.
"You now have permanent capital competing with a young couple trying to buy a home," said John Burns, who owns a real estate consultancy The Wall Street Journal. "That will make US homes more expensive in the long term." His firm, John Burns Real Estate Consulting, estimates that "roughly one in five homes sold in the top markets is bought by someone who never moves in."
"The limited housing supply, low interest rates, a global reach for returns and the so-called institutionalization of real estate investors have set the stage for another speculative, investor-driven real estate price bubble, ”the company said.
All in all, it's not hard to believe that the people who will be hardest hit by this bubble – the same people negatively affected in virtually every institution in this country – are blacks like me. Still, I have to believe that home ownership is achievable for me. I have to keep trying for the generations that come after me. I just hope my efforts will not be in vain.
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