Owning a home is the tell-tale sign of acquired prestige in our society, The Huffington Post reports. In a recent story we did, a survey revealed that 60 percent of African Americans did not own the home they desired, but 20 percent are living the highly-coveted “American Dream.” That house-less 60 percent believe their children will eventually own the home they’ve always wanted, says a survey conducted by Better Homes and Gardens.
According to the 1,200 respondents polled, 73 percent of whites, 90 percent of Latinos, and 83 percent of blacks assumed that the next generation will own a bigger home before the age they did.
The positive expectations radiating from ethnic groups, however, do not correspond with the current real estate climate concerning minorities. The number of white homeowners is 28 percent higher than that of blacks, which is detrimental to African-American wealth. Also, blacks lost more than 50 percent of their median household wealth between 2005 and 2009, reports a study by the Pew Center.
Expensive subprime mortgages are to blame for the race rift created in the real estate world. They are supposed to be loans for people with poor credit scores, but these high-interest loans have mainly been issued to African-American neighborhoods, in some cases even when the candidate qualifies for a better deal. In 2012, blacks were 2.3 times more likely to get high-interest loans than whites, according to The New York Times.
Those who choose to pursue these high-cost lending practices to own a home find that foreclosure is a major concern in their lives.
There is kind of a bright side for those worried about foreclosure. The National Mortgage Settlement, a service that investigates unfair foreclosure practices, may be the turning point for homeownership. It helps to protect those who may unfairly have their homes recovered by the bank.
There’s only one problem. The National Mortgage Settlement expires after three years in a state if the government chooses not to renew it.
A secondary problem: rising mortgage rates that have put a damper on demand. But the number of foreclosures has decreased.
Do you think the housing market will be less exclusionary to minorities in the future?