As noted in a recent Washington Post article Study Ties Black Wealth Gap to Stubborn Disparities in Real Estate, “The racial wealth gap is the civil rights agenda for the 21st century,” said Thomas M. Shapiro, the study’s lead author and director of the institute at Brandeis. “It is a concrete way of assessing where we are as a society when it comes to racial justice.”
The article adequately depicts the current financial situation for many African American families across the nation, a reality that is very present in Washington, DC. For Manna, Inc. whose mission is to, “…help low and moderate income persons acquire quality housing, build assets for families through homeownership, revitalize distressed neighborhoods and preserve the racial and ethnic diversity” the article affirms a commitment to ending the cycle of poverty through creating access to home equity through homeownership. The article also points to the continued discrepancy between whites and blacks in the ability to gain wealth through increased employment opportunities regardless of profession or education level. However, access to homeownership and the equity it creates is cited as the most pressing issue:
Still, the biggest driver of the wealth gap between whites and blacks remains homeownership. “Blacks and whites have always had unequal access to the housing market,” said Thomas J. Sugrue, a professor of sociology and history at the University of Pennsylvania.
In the years after slavery, black homeownership was limited by violent racism and discrimination. The expansion of homeownership during the New Deal era all but excluded blacks. Then, redlining limited mortgage financing in many black communities.
Blacks began to gain a real foothold in homeownership in the 1960s and 1970s. But whites and businesses often fled the neighborhoods preferred by blacks, Sugrue said.
Blacks began to make steady progress in the 1990s, and the black homeownership rate peaked at 49 percent in 2004. But blacks were more often steered into subprime and other high-cost financing. The housing crash led to a massive wave of foreclosure that hit blacks disproportionately hard. The crash and subsequent recession eliminated half of the collective wealth of black families. The black homeownership rate is now 44 percent, far below the white rate of 73 percent.
In response to these stark realities, Manna in partnership with DHCD will be holding its second annual East of the River Homebuyer Fair. The event will include financial workshops; credit counseling; listings of available properties; downpayment assistance opportunities and mortgage lending services. This event will be held at Thurgood Marshall Academy and will be marketed to current residents in both Wards 7 and 8. Current residents will have opportunities to get better acquainted with the home purchasing process and to benefit from homeownership East of the River.
According to Manna’s Frank Demarais, Vice President and Director of Manna Mortgage, DC is in the midst of an affordability window that may never come again. Potential buyers should understand that interest rates and home prices East of the River are at an all-time low (3-3.5%) but may not stay this low for very long:
1.) If rates move up 1.5% (back to ‘normal’ levels) monthly costs go up $180 per month ($200,000 home price example)
2.) If home prices move up $20,000 for same house, costs go up $110 per month
3.) So, if a $200,000 house goes up to $220,000, that would cost about $290 more per month when rates move up
4.) That is $3,500 more a year, and buyers would need income of about $9,000 a year more to afford the same house.
The time to buy is now and the financial and educational resources exist! Please get the word out and plan to attend Manna’s 2nd annual East of the River Homebuyer’s Fair!