With a homeownership rate of 44.1% for the fourth quarter of 2020, African Americans remain far behind the 74.5% rate of non-Hispanic white households who own homes, according to U.S. census data.
In Utah, the gap for the Black community remains significant when it comes to overall homeownership rates, mirroring the rest of the nation. Comparatively, Hispanics registered at an estimated 49% rate, with Asians coming in at a 63% homeownership rate.
However, during the coronavirus pandemic, African American homebuyers joined a rush of Utahns looking for their piece of the American dream. Even against that backdrop, concerns remain about the overall effect the pandemic-slowed economy will have on long-term homeownership goals.
Trying to live the dream
For Salt Lake City resident Jasmine Walton, 26, becoming a homeowner wasn’t really on her radar until adulthood. She grew up in a family that rented rather than owned the places they lived while she was coming up in Texas prior to moving to Utah about 15 years ago. As a result, she never really understood the advantages of homeownership.
“My parents were mostly just renters and so growing up we just lived in rentals, so now I figured out that homeownership is the fastest way to build wealth and have equity,” she explained. “That’s why me and my fiance have been working toward buying a home. With the increasing rental prices, why wouldn’t we just buy a home if we are spending so much rent when we could have a whole house and it would be ours?”
She said after nearly two years of deliberating, Walton and her fiance, Miles Ellis, decided last summer to begin the process of qualifying for a mortgage and finding a trustworthy real estate agent to begin the hunt for their first house.
“With the decrease in interest rates and everything that happened with COVID, it just became more apparent that we needed to get into our own home so we can have more control over who we’re around and what’s happening,” Walton said.
The couple also gained inspiration from her fiance’s late grandfather, one of the first African Americans to be in the real estate industry in the Beehive State, she said.
“He talked a lot to us before he passed about having your own home and how important homeownership is, so that’s really what helped drive my fiance,” she said.
She said Blacks and other minorities considering buying a home should seek out people who have gone through the process whom they trust and respect to give them insights on what is required to become a homeowner.
“That really helped me through being (comfortable) with wanting to buy a house especially being as young as we are making such a major purchase,” Walton said. “Just having good people in your corner who can help you through that process is really important.”
Learning the ropes
Helping the couple wade through the homebuying process has been Utah real estate agent Chris Harper, who is also African American. He said one of the keys to addressing the homeownership gap is getting Blacks or other minorities educated so that they realize they can actually do it.
“There is a fear for some odd reason about actually pulling the trigger to take advantage of the things that are right in front of us,” he said. “There are actually (programs) and grants out there for folks to take advantage of that we just don’t know about or you get agents that are not so well-versed on these kind of things and it really discourages people.”
Since the COVID-19 pandemic struck last year, prospective borrowers with a credit score in the 620 to 630 range can qualify for home loans these days, and even as low as 590 to 600, he said.
“If someone would just take the time to just show people that it can be done or what they need to do — just put it on paper and say you can do X, Y and Z, then this is what your opportunity is,” Harper added. “Legitimately, it just comes down to the square root of information.”
Overcoming obstacles, accessing resources
Cyndi Roberts, Utah diverse segments manager at Wells Fargo Home Lending, said information is the key to mitigating the issues facing African Americans in Utah and elsewhere around the country.
“They face a significant barrier when it comes to buying a home. They feel like saving for a down payment is really an obstacle and sometimes they don’t understand credit and things like that,” she said. “Becoming educated on homeownership, we have found from studies, that is a big obstacle as well as finding an affordable home.”
During the pandemic home prices in the West have increased rapidly, making affordability a significant issue for metro areas throughout the region, she noted.
“We all hear about affordability of homes, it’s really really a challenge,” she said. “We’re finding that it tends to be more of a barrier in the African American community.”
She noted that homeownership is a major contributing factor in the overall wealth gap among demographic groups.
“We’re finding that the Black community lags compared to all other communities,” she said.
Roberts said increasing homeownership among Blacks can be a big step in closing that gap. She lenders around the country have developed programs and products that can help more minorities achieve their goal of owning a home, including free counseling and education workshops, as well as lending programs designed to help more African Americans become homebuyers.
While owning a home may be relatively common in some segments of society, not all populations are familiar with the concept, explained Maria Garciaz, CEO of NeighborWorks Salt Lake — a nonprofit organization helping to create homeownership opportunities for low income and minority communities.
“Our focus is really about education and helping families understand how important homeownership is in building their wealth that will be a legacy for families, and the responsibility of having a mortgage,” she said.
Those obligations include, among other things, planning for property taxes, she said, because families don’t always understand that part of homeownership responsibility.
“They see their monthly mortgage go up every year, but they don’t always understand the taxes,” she said.
Garciaz said local groups like NeighborWorks can act as a conduit to helping Black families and others understand the intricacies of being homeowners and what it takes to do so successfully over the long term.
That can be accomplished “through financing, through education, through coaching and connecting them with trusted resources in the community to help them through this homebuying process beyond what we can do to help them achieve that,” she said.