NAR’s guide to supporting Black homeownership
June 22, 2020
In today’s Daily Download episode, HousingWire interviews the National Association of Realtors’ Chief Economist Lawrence Yun on the organization’s five-point plan for supporting Black homeownership.
For some background on the episode, here’s a brief summary of the article:
The National Association of Realtors laid out a plan for how the real estate industry can step up to provide support in increasing the number of Black American homeowners.
While the homeownership rate for Black households has slightly improved and now sits at 44%, compared with an overall U.S. rate of 65.3%, it was only a year ago that it fell to 40.6%, which not only was the lowest level in the Census Bureau’s quarterly data going back to 1994 but was also the smallest share recorded for Black households since the 1950 decennial Census when it was 34.5%. The five-point plan includes:
1. Build more homes to increase supply: Yun stated that since the pool of potential first-time buyers is higher in the minority population, if the industry can increase supply, it could help minority households lock in a home.
2. Build more homes in Opportunity Zones: Yun posed the question: “Since the industry needs to build so many homes, why not build or sell homes in the Opportunity Zones to help revive some of those areas?” He added that there is even a tax break in certain geographically defined opportunity zones for developers to go in and build homes, helping the revitalization of economically-distressed areas.
3. Increase access to down payment assistance: While family members are stepping in to help address affordability issues, NAR stated that it is still much more difficult for Black Americans to obtain substantial financial assistance from family members. They added that increased access to federal down payment assistance based on a certain income threshold is vital, particularly for Black Americans.
4. Strengthen FHA’s loan program: Yun explained that many minority households are able to become first-time buyers by using FHA mortgages, making the product an important source of financing. NAR stated that shifting federal dollars to strengthen the FHA program could lower mortgage insurance premiums and monthly mortgage payments.
5. Expand alternative credit scoring models: NAR outlined that expanding credit scoring models to include rent and utilities payments would help Black Americans boost their credit score. Yun also shared an estimate from the National Association of Real Estate Brokers that alternative credit scoring would open up buying to 115,000 Black Americans annually.
The Daily Download examines the most captivating articles reported from the HousingWire newsroom. Each afternoon, HousingWire provides its readers with a deeper look into the stories that are not only chronicling the biggest announcements within the housing finance industry but are also helping Move Markets Forward. Hosted by the HW team and produced by Alcynna Lloyd.
HousingWire articles covered in this episode:
