For prospective Black homeowners, it’s “harder to catch up” in Charlotte
Charlotte’s population is growing rapidly but Black homeownership lags behind.
By the numbers: The homeownership rate among white households in Mecklenburg County is 68%, compared to 43% for Black households, per a recent report.
Jerell Fields, owner of the brokerage NOIRE Group and a local realtor who works with mostly prospective Black home buyers, tells me he noticed a lot of people don’t even know where to start.
- “There’s a lack of education within our Black community. Not understanding the benefits of buying can hurt you,” Fields said.
Why it matters: Homeownership is one of the primary ways American families build wealth. But for a number of reasons, Black residents in Charlotte, as well as nationwide, are behind white families when it comes to owning a home.
- This means that Black residents miss out on a major wealth-building opportunity.
Driving the news: High mortgage rates further decrease affordability, putting homeownership even further out of reach for prospective Black buyers, according to NAREB’s 2022 State of Housing in Black America report.
- “Because higher mortgage interest rates decrease home purchase affordability, Blacks, relative to Whites, will be further disadvantaged in their homeownership search,” the report read.
- The 30-year fixed mortgage rate is currently just over 6.4%.
Zoom out: Nationally, the Black homeownership rate was 45% in the third quarter, compared to a rate of 74% for white homeowners, according to the Census Bureau.
There are a number of complicated reasons behind the gap.
- The median household income for Black households nationally ($45,870) is lower than the $74,912 median income of white households.
- Black prospective homebuyers often have a harder time accessing traditional credit and banking services, per LendingTree.
- A recent Zillow analysis found that 20% of Black applicants in North Carolina were denied mortgages in 2020, compared to 10.9% of white potential buyers, Axios’ Michael Graff reported.
What’s more, historical discriminatory practices such as redlining and the bulldozing of Black neighborhoods like Brooklyn have contributed to lower homeownership rates among Black residents.
- For instance, When Myers Park was built in the early 1900s, deeds included restrictions stated: “This lot shall be owned and occupied by people of the Caucasian race only,” as Michael reported.
Yes, but: A lot of young Black people are moving to Charlotte. Apartmentlist ranked it the eleventh best city for young Black professionals.
- “Increasing the number of Black professionals can translate to more families and individuals being in a position to become homeowners. And that is a good thing,” said NAREB president Lydia Pope.
- The housing disparity will require addressing discriminatory policies — but young Black professionals moving here and entering workplace also helps, Pope added.
What’s happening: A couple of banks have recently launched programs to combat homeownership inequalities affecting local Black communities.
- Bank of America rolled out a program providing first-time buyers of any race in certain Black and Hispanic neighborhoods with zero-down down payment loans. “While the programs is still in the early stages, we have had an enthusiastic response so far,” Bank of America spokesperson Alex Lawson told Axios.
- For current homeowners, Wells Fargo’s program aims to ensure Black-owned homes are being properly appraised.
“There are so many programs working to decrease the gap but it’s going to be harder for Black people to catch up at the rate of our counterparts,” Fields said.
Efforts to increase Black homeownership will not shrink the gap immediately, he adds.
The bottom line: The road to building generational wealth through homeownership won’t happen without education and representation.
- Children with parents who are homeowners are 8.4% more likely to own a home, according to a study by the Urban Institute.
“If you grew up watching people around you renting all your life but as an adult, someone tells you that there’s wealth in ownership, you may not have someone to help you understand the process,” Fields said.
Editor’s note: We have updated this story with additional details about Bank of America’s program.
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