Black Millennials Buy Block In Home Spending Madness
For black America, the pursuit of the American dream of homeownership has never wavered with adults in this demographic aged 26 to 39, causing the overall rate to rise nationwide. U.S. Census data shows this group increased the homeownership rate for all black Americans from more than 2% during the first three quarters of 2020. With nearly $ 200 billion lost in wealth and equity since the Great Recession, African Americans risk seeing all of their median wealth extinguish by 2053, however, this new wave of home ownership among black millennials could change that.
The breakdown you need to know:
CultureBanx noted that Homeownership is still one of the primary ways all Americans build wealth, as the national rate of black homeowners is 41%. Black Millennials are striving to increase that number by cutting back on personal spending, which has enabled wealthy and middle-class black Millennials to take advantage of record mortgage rates in markets where available housing is relatively scarce. November Analysis of the National Association of Real Estate Agents showed that 5% of Americans who bought homes were black, 1% more than in 2019.
The National Association of Realtors and the National Association of Real Estate Brokers both said black millennial new buyers made the bulk of African-American home purchases in 2020, as many left their apartments to buy homes. in the suburbs. Moving to the suburbs has become increasingly diverse, with 39% of African Americans making their home in the area in 2014, according to the Brookings Institute. This is a notable change from 2000, when only 33% of African Americans lived in the suburbs.
It is important to note that the Black Millennials who bought homes in 2020 are not representative of the bulk of Black Americans, whose economic situation has deteriorated throughout the pandemic. Some economists wondered if Black Millennials could even buy homes given their disproportionate rates of student loan debt and other systemic inequities such as mortgage bias and redlining.
Racial real estate redlining:
Over the past 20 years, there has been a catastrophic loss of property in key cities with a large proportion of black homeowners. In Cleveland it’s 53% Black, Baltimore it’s 63% Black and Philadelphia it’s 44% Black, homeownership decreased by 11%, 7% and 3% respectively, and in large part because of redlining, according to Brookings. Until 1968, banks could refuse mortgages based on a buyer’s race or neighborhood, and predominantly white communities could enact zoning restrictions designed to prevent people of color from entering neighborhoods. .
Government housing policies, such as redlining, have had lasting effects, from the concentration of poverty to the smothering of African-American property, and has contributed to the widening of the racial wealth gap. Even Atlanta Federal Reserve Chairman Raphael Bostic has denounced things like the impact of long-banned policies, including how black “red” people outside white neighborhoods continue to influence the capacity of minority families. to accumulate wealth. Simply put, redlining and other housing policies continue to undermine the accumulation of black wealth.
Low mortgage rates and a new cultural focus on wealth creation among African Americans, all factors are driving black “mortgage-ready” millennials to buy homes. Those with good credit and stable incomes who are suitable mortgage applicants buy homes in markets where owning a home is often cheaper than renting. Real estate agents and economists say they expect the home buying trend among Black Millennials to continue in 2021.