Homeownership gap is largest component of America’s racial wealth gap

The National Association of Real Estate Brokers (NAREB) has released its annual State of Housing in Black America report. Among the findings, Black applicants are more than twice as likely to be denied a home mortgage as their white counterparts. This continues to exacerbate the racial homeownership gap, which in turn comprises the largest component of America’s racial wealth gap. The median wealth of white households in the U.S. is around $218,000, while that of the median Black household is closer to just $18,000. Here in Minnesota, we have the fifth worst racial homeownership gap in the country – 77.5 percent of whites own their own home, compared to just 30.5 percent of Blacks. And not surprisingly, we have a similarly poor racial wealth gap, which ranks third worst in the country according to a recent study.

The NAREB report notes the homeownership gap’s persistence even though outright racial discrimination has been illegal since passage of the Fair Housing Act in 1968. Report co-author Jim Carr states, “Blacks are making progress in slowly obtaining homeownership. But the barriers are so substantial and so multifaceted that they’re never going to come anywhere near closing the gap unless the federal government takes action that repairs the damage which the federal government did.” (For more on that topic, see our new webpage on the history of homeownership.) Toward that end, the report calls for six proactive steps to be taken:

• Eliminate Loan Level Price Adjustments
• Eliminate Penalty Fees to Access Down Payment Assistance
• Recalculate the Impact of Student Loan Debt
• Leverage Special Purpose Credit Programs
• End Discriminatory and Abusive Appraisal Practices
• Fix the Broken and Out-of-Date Housing Finance System

Each of these steps is explained thoroughly in the 2022 report.

The Center is planning to discuss the 2022 State of Housing in Black America report in more detail on an upcoming episode of the Welcome Home podcast. Leaders with NAREB’s Twin Cities chapter will join host Bill Gray for that discussion.