Homes owned by Black people valued less in Detroit
Add Axios as your preferred source to
see more of our stories on Google.
Detroit from above Linwood Avenue. Photo: Samuel Robinson/Axios
Metro Detroit homes owned by Black people are typically worth nearly 45% less than those owned by white people, according to Zillow data shared with Axios.
Why it matters: Homeownership remains the biggest driver of the wealth gap, writes Axios' Brianna Crane.
Driving the news: As of December 2023, the average value of homes owned by Black people in Metro Detroit ($138,000) is almost half that of homes owned by white people ($254,000).
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's happening: The appraiser workforce is majority white, according to the Department of Housing and Urban Development, and it's often difficult to report appraisal discrimination — though new federal policies aim to address that.
- Appraisers' knowledge of Detroit neighborhoods is part of the issue, Ashley Williams Clark of Detroit Future City, a nonprofit think tank studying the city's economy, told the Detroit News last year.
Between the lines: 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 that DTI ratio up, she says.
- Compared with 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.
Of note: Research from Detroit Future City released last year showed the demand for mortgages by Black homebuyers increased 188% across the metro area over the past decade, according to the study.
- Between 2012 and 2021, demand among Black residents increased 443% for homes in Detroit and 159% in the suburbs.