Black Americans excluded from pandemic housing boom

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By Chauncey Alcorn

Everett Benyard believed he was finally in a good enough financial position to buy his first home earlier this year. He had saved money by living with his parents for a while and got a better paying job in 2020.

But the 30-year-old San Diego Corrections officer struggled to compete in one of the hottest real estate markets in the country, where the median price of single-family homes hit $ 860,000 in July, according to the California Association of Realtors.

“I was just bidding, bidding big,” Benyard told CNN Business in a recent phone interview. “I went and saw a lot of different places. … I would go see something and the next day it would be off the market.

Benyard is one of many black Americans disproportionately priced due to the housing boom fueled by the pandemic.

Before the pandemic, the rate of black homeownership in America was rising slowly but steadily – a small but important economic bright spot amid racial inequality. Then the pandemic halted this upward trend, even as homeownership among white Americans continued to climb.

“It’s so competitive in this market right now,” Benyard said. “The prices are extremely high.

San Diego’s “significant disparity”

A recent analysis by the Center for American Progress, a liberal think tank, showed that the country’s black homeownership rate stood at just over 44% at the end of last year, virtually unchanged from the same point in 2019. The homeownership rate for white Americans increased to 74.5% from 73.7% during the same period.

“Homeownership among African Americans has grown more slowly than among white households during the pandemic, despite historically low mortgage interest rates,” the study authors wrote. “Simply put, black households faced more barriers to owning and staying homeowners because they had less money to fall back on. “

This disparity is visible in the hometown of Benyard, San Diego. Like many communities known for their pleasant climates and relative accessibility compared to their larger metropolitan neighbors, San Diego has been inundated over the past year by wealthy homebuyers in the tech industry, officials say. the San Diego Nonprofit Foundation.

While San Diego County real estate is much more expensive than the national average, it’s a steal compared to typical homes in San Francisco, where Zillow data shows the price of a typical home has reached. over $ 1.5 million in July.

The trend is hurting all aspiring homeowners in the area, nonprofit officials have said, but the group is concerned it will exacerbate inequalities of racial wealth in the city. According to a Redfin study, 61% of white households in San Diego owned their own homes in 2018, compared to just 30% of black households.

“There is clearly a significant disparity there,” Pamela Gray Payton, vice president of community impact for the San Diego Foundation, told CNN Business. “It’s difficult to enter the market if you are not already in the market. “

The biased impact of the pandemic

Black Americans are overrepresented in low-paying service sector jobs that have been disproportionately affected by layoffs during the pandemic. Black Americans also tend to carry a heavier burden of student debt, earn less money, and have less savings on average compared to their white counterparts.

In its study, the think tank notes that the nation’s history of mortgage redlining and discrimination has contributed to black households having on average less wealth than the general population, making less likely that black millennials and Gen Z can count on their parents to help them. buy their first home.

“It’s just emblematic of the confluence, of the coming together of many different economic pressure points for people of color,” said Christian Weller, one of the study’s authors and senior economic policy researcher at the Center for American Progress.

“They lose their jobs sooner than whites. They are out of work longer, ”Weller added. “They have less savings, which means they have less money for a down payment. Things can get out of hand very quickly, especially for African American homeowners. “

Almost a quarter of all home buyers today are cash buyers who do not use mortgages, according to Jessica Lautz, vice president of demographics and behavior at the National Association of Realtors, who says the current market favors the wealthiest Americans who tend to be white.

Between April and July of last year, 82% of Americans who bought a home were white, according to a study by the National Association of Realtors. Only 9% were Hispanic, 8% were Asian and 5% were black, according to the group’s researchers.

“It’s a small part of the economy that is able to pay everything in cash for real estate appraisals and waves,” Lautz told CNN Business. “We see that a very large portion of them are white individuals.”

Help for future buyers

Benyard, the Corrections Officer, recently received a major helping hand in his search for a home purchase.

In July, the Urban League of San Diego County, a local division of the national civil rights group, informed Benyard that he had been selected to receive one of several down payment assistance grants under the new the group’s Black Homebuyer program.

Eligible Black San Diego County residents who qualify for income, employment, and credit from the program and complete the Urban League Homebuying Training Course can receive over 70,000 $ in financial assistance for the purchase of a house.

San Diego County Urban League chief operating officer Al Abdallah said the “first of its kind” program is designed to bridge the city’s racial wealth gap by helping black residents who are qualified to own a home, but need help competing with wealthier buyers.

“It will help them cross the finish line,” Abdallah told CNN Business. “You can work as hard as you want, but it’s very difficult, if not impossible, to save $ 70,000 to buy a house. “

The-CNN-Wire
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