In the Locked Out: Black Women, Wealth, and Homeownership series, members of Insight Center, Springboard to Opportunities, and several expert co-authors connect the lived experiences, hopes, and dreams of low-income Black women and their perspectives on homeownership to the historic and current policies that fuel our exclusionary housing market—and its impact on health and wellbeing—to advocate for equitable housing solutions for Black women.
A house is far more than a structure. In financial terms, American neoliberal thinking leads us to believe that a house is an investment and potential pathway to wealth. Intrinsically, however, a house is a home where we find security, privacy, and family. It is a place where we gather and host our loved ones. There are myriad reasons one would want to own a home—and in America, homeownership is a nearly universal aspiration. But there is a devastating lack of equity when it comes to who can afford this American Dream, with Black households less likely to hold real estate assets than white households by 29 percentage points.
Our discussion of homeownership as a driver of wealth is misplaced. Home ownership has long been touted as a solution to racial wealth inequality. However, believing that “homeownership drives wealth” is equivalent to saying that “wealth drives wealth.” Given the rules, policies, and structures that define our housing market today, ownership and maintenance of a home requires seed wealth, which generally comes from intergenerational wealth transfers.
Given that racial and gender wealth inequality continues to grow—with white families possessing 10 times the wealth of Black families—Black people are at an automatic disadvantage in the housing market, with less wealth to draw from as a community due to historic and contemporary structural barriers. For Black women, an added dimension of sexism makes achieving homeownership nearly impossible; Black women are 256 percent more likely to receive a subprime mortgage than a white man with the same financial profile.
There is also a significant racial gap in benefits for Black people who do manage to overcome structural barriers to homeownership. According to recent research, due to racism within the real estate market, the median value of Black real estate assets in the US is about 60 percent of the value of white real estate assets. This disparity has stripped the Black community of tremendous wealth. Brookings found the average Black home is undervalued by $48,000, adding up to an astounding $156 billion cumulatively.
For Black women, an added dimension of sexism makes achieving home ownership nearly impossible.
Although rates of homeownership have improved for households headed by Black women, homeownership is not an automatic financial wealth builder for Black people, who still possess little to no wealth (across educational levels). We must understand that Black people are not going to build financial wealth in the same ways and with the same tools as white people. As we emphasize above, wealth is iterative—and so, wealth built from homeownership today is predicated on the wealth of previous generations.
The uneven pandemic labor market recovery also makes it unlikely that a Black woman will attain the financial stability needed to apply for a mortgage, with the unemployment rate for Black women still far higher than that of women of other races due to occupational segregation that pushes Black women into low-paid, unstable work. While the persistently high unemployment rate for Black workers should be a primary concern for policymakers, esteemed experts have treated the problem like trivial collateral damage. Such experts include former Treasury Secretary Larry Summers, whose plan to tame inflation requires a sustained period of high unemployment—a burden that will fall on workers of color and could drive Black unemployment to 20 percent, just as it did 40 years ago. Such widespread Black unemployment would be nothing short of devastating, especially given that the recent spike in inflation also hits Black women particularly hard as they face both race and gender wage gaps.
On top of this, the Federal Reserve’s response to curbing inflation by upping interest rates harms Black Americans as they are disproportionately affected by hiring slowdowns and already face higher mortgage rates than white borrowers. These results are no accident. They are the predictable consequences of racist and sexist public policies and banking practices that intentionally exclude Black Americans—and Black women specifically—from homeownership as a pathway to economic and emotional stability.
This is true historically and in our current home-buying boom, in which Black women are unable to compete with the resources of white homebuyers. This strips Black women of both the tangible material assets and the intangible benefits—the sense of safety, peace of mind, and joy—that a home of one’s own provides.
Introducing Locked Out
In a new NPQ essay series—Locked Out: Black Women, Wealth, and Homeownership—members of Insight Center, Springboard to Opportunities, and several expert co-authors will explore different facets that are often not connected as part of the bigger picture of Black women’s homeownership, or lack thereof. Grounded in the lived experiences, hopes, and dreams of Black women, this series will examine and connect the historic and contemporary policies that fuel our exclusionary housing market, the mental health effects of housing insecurity, how extremely low-income Black women living in subsidized housing view homeownership, and solutions to create a more equitable housing market for Black women.
We will release these essays over the next few weeks, starting with a piece that challenges the long-held narrative that Black women are a monolith by focusing on the experiences of Black women living in poverty, highlighting that for such women, homeownership is a dream—and one that they deserve to achieve.
Looking to the lives of Black women moves us toward solutions that redefine wealth.
That piece will be followed by an exploration of the policies and practices, both past and present, that have locked Black women out of the dream of homeownership, denying them access to wealth building through homeownership that their white peers enjoy. We then outline the mental and physical health impacts of housing insecurity, using data from recent guaranteed-income programs and highlighting that Black women face dual stressors of racial “weathering” and sexism. Next, we examine wealth dynamics through the myth of the Black middle class, stressing that homeownership does not generate wealth for Black women to the extent that it does for middle-class white people. The series will close by presenting solutions that center Black women in an effort to reimagine the housing market and create more equitable outcomes. Looking to the lives of Black women moves us toward solutions that redefine wealth.
By combining Insight Center’s expertise in advancing race- and gender-equitable economic policy and Springboard’s deep field experience combating poverty by centering Black women, we provide context for understanding the housing market’s inequities. Ultimately, we offer a roadmap for leaders to enact concrete solutions that will ensure Black women have the same opportunity as other Americans to own homes of their own.