Boston Condos for Sale and Apartments for Rent
What should the government’s role be in homeownership?
As we celebrate Black History Month, we honor and recognize the past and present experiences of Black Americans. A significant part of this experience is investing in a Boston condo of their own. While equitable access to housing has come a long way, the path to homeownership is still steeper for households of color. It’s an important experience to talk about, along with how working with the right real estate experts can make all the difference for diverse homebuyers.
We know it’s a more challenging journey to achieve homeownership for some because there’s still a measurable gap between the overall average U.S. homeownership rate and that of non-white groups. Today, the lowest homeownership rate persists in the Black community (see graph below):
Homeownership is an essential piece for building household wealth that can be passed down to future generations. However, there are obstacles in the homebuying process that can negatively impact certain racial and ethnic groups, including the Black community. This can delay or prevent many from achieving homeownership, challenging their ability to grow their net worth. A report by Vanessa G. Perry of the George Washington University School of Business and Janneke Ratcliffe of the Urban Institute explains:
“. . . households of color have much lower homeownership rates than white households and consequently hold, at the median, just one-eighth the wealth of white households.”
On top of that, when Black households do become homeowners, research shows they pay more for those homes overall than the average household. Raheem Hanifa, a Research Analyst for the Joint Center for Housing Studies of Harvard University, tells us:
“Black homeowners not only have primary mortgages with higher interest rates than white homeowners with similar incomes, they also have higher interest rates than white homeowners with substantially lower incomes, . . . Black homeowners have experienced systemic barriers to homeownership and wealth-building opportunities that have limited their ability to access credit, which is a key component in receiving low mortgage interest rates.”
For Black homebuyers, the inequity that remains in housing can be a point of pain and frustration. That’s why it’s so important for members of diverse groups to have the right team of experts on their sides throughout the homebuying process. These professionals aren’t only experienced advisors who understand the market and give the best advice. They’re also compassionate allies who will advocate for your best interests every step of the way.
Boston Condos for Sale and the Bottom Line
Opportunities in real estate improve every day, but there are still equity challenges that many face. Let’s connect to make sure you have an advocate on your side as you walk the path to homeownership.
Boston Real Estate Blog Updated 2022
Boston Real Estate
Back in the 1990s during the Clinton administration, the U.S. housing policy seemed to assume that more homeownership was always better.
The Clinton administration even launched the “National Homeownership Strategy,” whose stated goal was to “attempt to help all American households become homeowners.” If I’m not mistaken our Massachusetts Rep Barney Frank was a big advocate of this homeownership initiative.
Why am I bringing up housing policies of the past? I just find it striking how the concept and the importance of owning your own home is no longer the American dream, well at least not to our government. Check out the newest version of the housing finance report from the Obama administration which can be summed up simply: not everybody should own a home.
The Administration believes that we must continue to take the necessary steps to ensure that Americans have access to an adequate range of affordable housing options. This does not mean all Americans should become homeowners. Instead, we should make sure that all Americans who have the credit history, financial capacity, and desire to own a home have the opportunity to take that step. At the same time, we should ensure that there are a range of affordable options for the 100 million Americans who rent, whether they do so by choice or necessity.
I actually agree with this new policy over Clinton’s. I don’t think it the government’s responsibility to ensure that all Americans should have homeownership. However, I still think at least in the short run, we still need Fannie and Freddie. If we abolish these entities I think Boston real estate market and national home prices would tumble, this would be bad for those owning a home or planning to sell. If you’re a potential home buyer, I don’t think abolishing Fannie and Freddie well help you either. Why? I think it would be nearly impossible for new buyers to get 30 year fixed loans relying solely on the private sector, especially at these current interest rates.
Am I off base on this? What are your thoughts?
