Exclusive: Home values by race, mapped
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Metro Chicago homes owned by Black people are typically worth nearly 40% less than those owned by white people, per data Zillow exclusively shared with Axios.
Why it matters: Homeownership remains the biggest driver of the wealth gap, according to the U.S. Department of Housing and Urban Development.
The big picture: The typical value of U.S. homes with Black owners ($291,000) is 18% less than those with white owners ($354,000).
What they're saying: "It's no longer a myth or legend that this happens," HUD chief of staff Julienne Joseph tells Axios.
- The appraiser workforce is majority white, and it's often difficult to report appraisal discrimination, though new policies aim to address that, Joseph says.
What's happening: Although racial discrimination in the sale, rental and financing of housing was outlawed in 1968, racism is still deeply embedded in every part of the buying process.
- Black borrowers in Chicago were denied a mortgage in 2022 at a higher rate (15%) than the overall population (8.3%), Crain's Chicago Business reports.
High debt-to-income ratios and poor or nonexistent credit history are the largest reasons Black mortgage applicants are denied at a higher rate than other racial groups in the U.S., Urban Institute researcher Jung Choi tells Axios.
- Higher amounts of debt and delinquent payments are tanking credit scores and driving up that DTI ratio, she says.
- Compared to other groups, Black people are most likely to be unbanked, largely due to a lack of trust — spurred by predatory lending and discriminatory banking practices.
Zoom in: Real estate agent Courtney Ramirez, who is Black and owns a home in Forest Park, shared her tips for Black homebuyers.
Enlist a lender, loan officer or financial adviser early to understand your options and learn about available resources, Ramirez tells Axios.
- She got down payment help for her first house, a condo, from a program geared toward first-time buyers.
Choose a location based on your own needs and interests.
- "Don't let anyone steer you to a certain area, be it friends, family or [agents], just because of its racial or ethnic makeup," says Ramirez, who calls that "modern-day self-redlining."
Shop your loan. Working with a broker who competes for the best rates and benefits can help ensure you don't borrow outside your means, Ramirez says.