Black homeownership – why the American Dream is still elusive
“There’s this assumption that humanity moves forward all the time, that we’re on an inevitable march to progress by any indicator,” he told MPA. “But the truth is that we falter, we do takes steps backwards, and this is a glaring example of that. Not only are we not doing better than previous generations, but somehow managing to do worse.”
Fortunately, much has changed. In 1960, it was legal to refuse to sell a house to someone because of their race, Bushra noted. Yet there was still more parity between Black and White homeowners at that time than there is today more than 60 years later, according to his findings. As evidence, he provided a damning statistic: The gap between Black and White homeownership rates in 1960 was 27 percentage points, while that gap was over 29 percentage points in the first half of 2022.
Many who have seen his findings have registered surprise, he noted. “What I found interesting is that most people’s instinct was one of surprise when they hear this because it seems counterintuitive,” he said. “But it comes down to the fact that there is not enough knowledge on the topic.”
Generational wealth truncated
To fully appreciate how detrimental the gap is, he said, is to remember that homeownership in the US guarantees more than mere shelter. To wit: According to the Federal Reserve, homeowners have nearly 12 times as much wealth as renters, with an average of $1.1 million compared to renters’ average wealth of just $95,000.
As a result, low rates of homeownership put Blacks at a disadvantage in terms of overall wealth as well, he added. “The fact that such a relatively small percentage of Black families own a home today is an indication of less wealth overall, and less ability to transfer intergenerational wealth to their children. And, of course, equity in a home can provide a financial buffer in an emergency.”