Written by Bill Kozar
Reading Time: 5 min
Today, decades after the 1968 Fair Housing Act helped make racial housing covenants and redlining illegal in the United States, Black Americans are struggling to become homeowners because of the same obstacle virtually all other consumers are facing – a lack of housing inventory.
In fact, the lack of available housing is cited as one of the biggest obstacles Blacks are facing today, according to the 2023 State of Housing in Black America (SHIBA) Report. The shortage has increased housing prices, reduced housing sales and even made it more difficult for renters to save enough money to buy their first homes. Because the Black population is not as financially strong as others, the housing shortage has exacerbated the negative impact on Black homeownership, the report stated.
“This year, the report looked at the impediments to Black homeownership and the ways of increasing Black homeownership, and we identified affordable housing and housing stock inventory as the greatest impediments to Black homeownership,” said National Association of Real Estate Brokers (NAREB) President Dr. Courtney Johnson Rose. “I think every real estate professional is feeling this in the market, but we (REALTISTS®) are feeling it more with our consumer base. What we’re finding is that there are not enough affordable homes and conditions and communities where our consumers want to live. So, to increase Black homeownership, there must be an increase in affordability, too.”
It is no coincidence that the 2023 SHIBA Report identifies the acquisition and retention of real estate to improve Blacks’ economic strength. NAREB has long championed that strategy of building generational wealth, said Johnson Rose. By gaining it, Black homeowners will be better equipped to cope with higher mortgage interest rates, inflation and increased home building costs.
Dr. Courtney Johnson Rose
President, National Association of Real Estate Brokers
Other steps will need to be taken to help potential Black homebuyers overcome mistrust that some have developed after facing years of discrimination and prejudice in their everyday lives. For example, local REALTIST® leaders can use the trust they’ve built in the Black community to educate potential homebuyers to shop for the best mortgage interest rates and not necessarily choose the first lender they meet, said Dearborn REALTIST® Board President Sanina Ellison.
Sanina Ellison
President
Dearborn REALTIST® Board
“Oftentimes, the distrust is so strong that it takes an organization like the Dearborn REALTIST® Board to get in front of the community and say, ‘Hey, it’s OK to trust the bank. It’s OK to apply for a loan,’” Ellison said.
Potential solutions
In addition to local affiliates like Dearborn forming supportive partnerships with organizations like Illinois REALTORS®, NAREB has proposed a number of ideas that its leaders hope will have a direct and positive effect on Black homeownership, say Ellison and Johnson Rose.
By increasing access to affordable housing stock and enhancing employment in the development processes that would produce new housing units, NAREB offers several ideas to increase the future number of Black homeowners, according to the 2023 SHIBA Report.
Those ideas include:
- NAREB Black Developers Academy – An initiative to provide Black professionals with the skills, knowledge and opportunities to become successful housing and community development professionals.
- Housing Preservation Exchange – NAREB proposes forming a partnership with the Housing Preservation Exchange, a nonprofit organization that works with federal, state and local agencies as well as nonprofit and philanthropic institutions to sustain and expand homeownership.
- National Homeownership Tax Credit Program – NAREB is recommending that the federal government enhance the National Low Income Tax Credit by adding owner occupied properties to its production of new and rehabilitated affordable rental housing in underserved urban and rural communities and in high-cost suburban areas.
- First Choice Mortgage Product – NAREB wants Blacks added to the U.S. Department of Housing and Urban Development’s (HUD) Section 184 housing program for Native Americans and Alaskan Native households, tribes and housing entities.
- NAREB Building Black Wealth Tour – NAREB plans to identify and educate members of Black households who are financially ready to purchase a home but either unaware of their potential or unfamiliar with the process of becoming a homeowner.
Illinois REALTORS® President Matt Silver discusses SHIBA report with Dr. Courtney Johnson Rose and Sanina Ellison
Matt Silver
Guest Host
They talk about solutions and takeaways from the latest State of Housing in Black America (SHIBA) report, the obstacles Black consumers face when they want to buy homes and what can be done to help them.
Four findings from the 2023 SHIBA Report
45%
In 2022, the Black homeownership rate was 45 percent, just a bit higher than when the 1968 Fair Housing Act was passed. The gap between Blacks and Whites is larger than it was more than 50 years ago.
In 1970, the difference between White homeownership and Black homeownership was 23.8 percent. In 2022, the difference between White and Black homeownership was almost 30 percent.
30%
10x
According to the 2022 Survey of Income and Program Participation, the median net worth of White households was $250,400, while the median net worth of Black households was $24,520. The 400 richest Americans control the same wealth as the 48 million Blacks living in the U.S.
According to the Bureau of Labor Statistics (BLS), Black unemployment was 4.7 percent in April 2023, while the White unemployment rate was 3.5 percent. The Black unemployment rate was the lowest ever recorded, while the gap between the two rates was the narrowest ever.
4.7%
About the writer: Bill Kozar is an Illinois REALTORS® Marketing Content Specialist.
