MReport January 2020

TheMReport — News and strategies for the evolving mortgage marketplace.

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54 | M R EP O RT O R I G I NAT I O N S E R V I C I N G DATA G O V E R N M E N T S E C O N DA R Y M A R K E T THE LATEST DATA African Americans' Homeownership Struggles Minority homeownership is at its lowest level since the 1960s, and African Americans face challenges in the quest to buy a home. A n article from The Washington Post revealed that black homeownership has been hit hardest by rising student debt. Additionally, the homeown- ership gap between black and white homeowners is at its highest level in over 50 years, according to research by the Urban Institute. "African Americans are already being left out of the housing market and that's exacerbating levels of inequality in this country," said Lawrence Yun, Chief Economist and SVP of research at the National Association of Realtors. "There's a kind of urgency now within the housing community to bring younger African American buyers into real estate." However, according to Melanie Gamble, Broker/ Owner of 212 Degrees Realty in Upper Marlboro, Maryland, that only tells half the story. Gamble chronicled the struggle communities of color have faced since the Great Recession in her book, Unintended Consequences. Gamble said minority homeownership is nearing record lows, even dating back before the 1960s when people of color were able to purchase homes. The U.S. Census Bureau reported that the African American homeownership rate for Q 3 2019 was 42.7%—far below the national average of 64.8%. The homeownership rate for white Americans was 73.4%, 47.8% for Hispanics, and 58.8% for Asians. "Of course the entire nation was impacted," Gamble said of the effects of the Great Recession, "but it impacted communities of color a lot worse. And unfortunately, we have not been able to recover at the same rates as other communities." Gamble cites many reasons for African Americans not being able to bounce back at the same rate as others and one of those reasons is the net worth of African Americans as a whole. "Unfortunately, a lot of people of color purchased homes with loans that were later deemed to be predatory. Homes were appreciating at a rapid rate and purchasers were being told, don't worry, you can always refinance," she said. "Once the recession hit and the market started to shift, you saw home values decline by as much as 50% in some communities and the possibility of refinancing vanished. Without any other real wealth, the net worth of African Americans essentially disappeared as a lot of homeowners found themselves upside down on their mortgage."

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