Over the last three decades, Black homeowners were twice as likely as white homeowners to lose their properties and return to renting.
That’s according to a recent study that found 1 in 10 Black homeowners returned to renting between 1984 and 2017, compared to 1 in 20 white homeowners, the USA Today reported.
Dartmouth College researcher Gregory Sharp, who co-authored the report, said the difference could come down to the availability of extended-family wealth in helping pay a mortgage.
“They might not have access to wealth in the family,” Sharp said. “So, therefore, because African American homeowners are already at a more vulnerable state on average, it stands to reason that they’re worse affected by these types of disasters like Covid.”
The report found that the average net worth of a Black homeowner’s extended family was around $133,000. For a white homeowner’s extended family, it was about $400,000.
The report could provide more insight when it comes to the nearly 3 million American homeowners who had mortgages in forbearance as of late October. That number has been dropping recently, but there are concerns that a wave of foreclosures could come once those assistance programs expire.
Owning property itself is a huge part of building family wealth and is part of the reason why white families had a median net worth of $171,000 in 2016, about 10 times more than Black families had, according to the Brookings Institution.
Racist policies adopted generations ago, like redlining, still impact Black homeowners today. Since 1980, homeowners in redlined neighborhoods https://therealdeal.com/2020/06/12/homeowners-gained-far-less-equity-in-formerly-redlined-areas-study/ — areas with mostly Black residents where lenders refused to provide mortgages — have built just half the equity of homeowners outside those areas where loans were made available. [USA Today] — Dennis Lynch