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Letter from Co-Chairs
LETTER FROM THE CO-CHAIRS
Steve O’Connor
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Senior Vice President Affordable Housing Initiatives Mortgage Bankers Association
Cy Richardson
Senior Vice President for Programs National Urban League
As we reflect on the first year of the Black Homeownership Collaborative and our collective commitment to creating 3 million net new Black homeowners by 2030, we understand more than ever the power of unified action to help us achieve our goals. In our first year, we have discussed and debated steps to actualizing our goals and the difficult choices of prioritization and focus. We have forged common ground on strategy and implementation on the steering committee and have found renewed energy in our workstreams and our individual strengths. No one organization can close the Black homeownership gap alone. The Black Homeownership Collaborative creates a dynamic space for diverse stakeholders to chart a course for a more equitable and just homeownership market. We are proud to be unified in our work and we are excited to see the Collaborative advance forward.
This report illustrates ongoing efforts to harness our collective strengths to find solutions. We strongly believe that our framework can facilitate further discussions and help build a consensus for national and local stakeholders. It will also provide a clear direction of how to allocate resources and how to work together to reduce racial homeownership disparities. While we gather here in the city of Atlanta, approximately 177,000 Black residents in this market are mortgage-ready today. We must work to address issues from housing supply to access to down payment and stand united in our commitment to advancing opportunities for all communities to thrive and prosper.
Together, we will continue to challenge and push back the barriers that Black Americans continue to face on the path to homeownership. We look forward to the impactful movement of the Black Homeownership Collaborative and extend our gratitude to all who continue to work towards a more equitable America.
A YEAR IN REVIEW ADDRESSING THE RACIAL HOMEOWNERSHIP GAP
URBAN INSTITUTE
The Black homeownership rate stands at just 42 percent, lagging the white homeownership by 30 percentage points. The gap is wider now than it was in 1960, when explicit racebased housing discrimination was legal, and Urban Institute research projects the gap will grow without concerted action. To address this concerning disparity, the Black Homeownership Collaborative has established a plan to increase Black homeownership by 3 million net new homeowners by 2030. This could result in 9.456 million Black homeowners and move the Black homeownership rate above 50% for the first time.
The Collaborative launched in 2021 amid the COVID-19 pandemic. Even prior to the pandemic, Black households faced systemic barriers to homeownership, including limited ability to save for a down payment, inequitable access to credit, and housing affordability constraints. Once it hit, the pandemic disproportionately harmed families of color, who experienced higher rates of job loss, financial insecurity, and housing instability.
The pandemic housing market has been a boon for existing homeowners while rising rents and home prices have put homeownership farther out of reach for many renters. As we mark the first anniversary of the collaborative, rising interest rates coupled with lack of starter homes to buy and continued tight lending standards pose further challenges. Strategies to increase the number of Black homeowners aim to both create new homeowners and sustain existing homeowners.
NEW ENTRANTS TO HOMEOWNERSHIP
Though precise data on entrances and exits to homeownership since 2019 are not yet available, Home Mortgage Disclosure Act (HMDA) data reveal that 299,093 mortgages to purchase homes were made to Black borrowers in 2020. Applying the typical first time homebuyer share of buyers using mortgages estimated by CFPB to be 45% from 2010 to 2018—we can estimate that roughly 134,592 of those loans were to Black first-time homebuyers.
HOMEOWNERSHIP EXITS
Foreclosure rates tend to be higher in zip codes with larger Black shares of the population. But since the pandemic’s onset, foreclosure rates have been low, due to the federal forbearance moratorium and other loss mitigation tools employed by the federal government. Protections against shocks can help sustain homeownership for Black households and contribute to closing the gap.
