Homeownership: A Wealth-Building Mechanism

Message from Our President & CEO, Yolanda Winstead

June is National Homeownership Month, and people around the country are shining a spotlight on the positive impact that homeownership has on families, the communities where they purchase homes and the organizations that help them achieve this goal.

A huge part of our mission is to provide opportunities for our residents and clients to build wealth through homeownership. Since its inception in 2004, DHIC’s Homeownership Center has helped more than 2,000 homebuyers achieve their goal of becoming homeowners, by educating them on the mortgage process, mortgage loan products (including down payment assistance), helping them become mortgage ready and equipping them with the tools needed to help sustain homeownership.

The equity gained by these homeowners as their properties appreciate in value provides them with assets that can be used to help fund higher education for their children, start small businesses and lay a foundation for passing wealth to future generations.

The systemic exclusion of Black Americans from accessing the government sponsored mortgage programs (which, in turn, helped build the middle class) through legally enforced segregation and redlining has resulted in the gap in homeownership and wealth among Black and White Americans that we are faced with today. According to the U.S. Census Bureau, at the end of 2020, 44.1% of Black Americans owned their homes compared with 74.5% of White Americans. That’s a gap of 30.4%, which is wider than when race-based discrimination against homebuyers was legal (Time.com: The Black Homeownership Gap Is Larger Than It Was 60 Years Ago. COVID-19 Made It Worse).

This disparity in homeownership rates significantly contributes to the disparity in the racial wealth gap. In 2019 the median White household held $188,200 in wealth – 7.8 times that of the $24,100 held by a typical Black household (Brookings.edu: The Black-white wealth gap left Black households more vulnerable).

Earlier this year, the National Community Reinvestment Coalition (NCRC) published a report entitled 60% Black Homeownership, A Radical Goal for Black Wealth Development. The report examines the decline in the black homeownership rate, and the widening gap between rates of black and white homeownership. The report discusses some of the root causes and goes on to propose strategies to reach a 60% black homeownership rate by 2030.

“For most Americans, homeownership is the largest component of their wealth. Disparate rates of wealth and homeownership are symbiotic issues that persist and continuously leave Black households behind in building generational wealth. One of the most vital ways to combat the racial wealth divide is increasing Black homeownership rates.”

So, when June has come and gone, and the national spotlight is no longer directly shining on homeownership, DHIC’s Homeownership Center staff will still be doing the work of educating and empowering first time homebuyers by providing individual counseling sessions and group education workshops. And in the process, helping to impact the racial gaps in both homeownership and wealth.