African Americans make up roughly 13% of the U.S. population, yet only make up 3 percent of the home-buying population in this country.
Although many of the nation’s top economists have stated that the recession has ended, there are countless African American families who are still feeling the pinch from the housing bubble, which has led to an overall negative impact on their family’s wealth.
U.S. Secretary of the Treasury Henry Paulson called the housing bubble, "the most significant risk to our economy," back in 2007 and since then, the wealth gap between White families and Black families in this country has significantly widened since that time and has contributed to an increased level of economic inequality.
A study that was recently conducted by Brandeis University showed that the wealth gap between African Americans and Whites has tripled over the last 25 years, due in large part to home ownership. According to the U.S. Census Bureau, from 2005 to 2010, the median net worth for White families dropped by 23 percent, which is significantly lower than the 60% loss rate for people of color. In 2009, the median net worth of White families was $265,000, compared to Black families median net worth of only $28,500.
Because African Americans have traditionally had fewer investment portfolios and earned lower wages, home ownership has been the primary way for African Americans to build wealth in this country for decades. Much of that wealth has been eroded, much in part, to the housing bubble.
According to a report by the Center for Responsible Lending titled, "Collateral Damage: The Spillover Costs of Foreclosures," among the 10.9 million homes that went into foreclosure between 2007 and 2011, half of the costs have impacted African-American families and people of color and have totaled approximately $1 trillion in home equity loss.
According to the Consumer Financial Protection Bureau (CFPB), in the 2000s, because of the widespread failures in consumer protection, rapid growth, and irresponsible lending practices, many lenders took advantage of gaps in the consumer protection system and sold mortgages and other products that were overly complicated to African American borrowers, and others, even when they did not have the ability to repay the loans. And although President Barack Obama signed the Dodd-Frank Wall Street Reform and Consumer Protection Act in 2010, with the intent of watching out for vulnerable borrowers, most of the damage had already been done.
The National Urban League and Zillow Inc. recently came together to author a research report that indicates that for many African Americans, financial inequity is a major obstruction to purchasing a home.
The report, "A House Divided: How Race Colors the Path to Homeownership," provided a detailed look at who owns homes in America, who got approved for home loans, and how long it took certain Americans to save enough to make a down payment. The report also revealed that African Americans face much higher barriers to achieving home ownership despite what economists and other reports suggest about the "so-called" recovery of the housing market.
The report also revealed that African American mortgage applicants have the highest loan application denial rate across the board, with 1 in 4 applicants denied, while White applicants have only seen a 1 in 10 denial rate. In addition to that, roughly 74 percent of White people own their homes, while less than one-half of African Americans do. The report also states that African Americans are far less likely to even apply for home mortgages and have a more difficult time saving up enough money for a down payment. According to the research, it takes African Americans 28 years to save up enough money to make a 5 percent down payment and 31 years if they want to make a 10 percent down payment.
This weekend, the Houston Black Real Estate Association (HBREA), in keeping with their ongoing commitment to serve the underserved community, is seeking to not only address these serious problems, but provide solutions as well to even the playing field for African Americans as it relates to home ownership.
HBREA will be hosting their 4th Annual Home Buying Lifestyle Expo at the George R. Brown Convention Center this Saturday April 12, 2014 from 10:00 AM till 4:00 PM and it is open to the public and admission is free of charge.
The Expo will be full of "free" home buying finance classes throughout the day, which will be conducted by housing and financial industry professionals. There will also be exciting workshops conducted by Interior Design; Do-it-Yourself home improvement tips; credit repair counseling clinics; a "Kid Zone" for parents who bring their children; a "Treasure Chest" full of prizes and giveaways; and much more.
Gerald Womack, President of HBREA, believes that this Expo and the HBREA are important resources for the African American community to build wealth and strengthen the community.
"Our history tells us that in 1947 a group of visionaries gave birth to this organization encouraged by the prospect of progress through organizing, and immediately launching an educational program to open the door to others interested in the real estate industry," says Womack. "If our future is to be guaranteed, we must serve our communities with integrity, trust and truth. I am ready to roll up my sleeves to ensure that we never lose sight of our founding principles, providing democracy in housing."
HBREA will also be giving away three (3) $3,000 payments to first-time buyers for down payment assistance by way of the Houston Area Urban Community Development Corp. (HAUCDC) which provides grants for qualified homeowners.
Representatives from the Harris County Appraisal District (HCAD) will also be on site to assist current homeowners with any questions or concerns they may have concerning their tax appraisals, homestead exemptions and they will have a representative available from their Personnel Division to discuss employment opportunities with H.C.A.D.
This year’s event is a collaborative effort with several agencies and participants providing comprehensive services and information to attendees in one setting. H.B.R.E.A. has garnered broad-based corporate support which includes: Title Sponsor, Capital One Bank; Major Sponsors include Bank of America, Chase Bank, Wells Fargo Bank, Prime Lending, Noel Furniture, Radio One- (KMJQ, 92.1 FM Stations) and the City of Houston (see attached compiled listing of sponsors & participants).
The public is encouraged to attend and take advantage of the many resources that will be available on Saturday, April 12th at the George R. Brown Convention Center.
HBREA is the local chapter of the National Association of Real Estate Brokers (NAREB) which was founded in 1947 and is the oldest and largest minority trade association in America. The Houston chapter was founded in 1949 and has been instrumental in being pro-active in serving all citizens who have the right to equal housing opportunities regardless of race, creed or color.
HBREA was founded by eleven progressive real estate brokers who were faced with the dilemma of discriminatory real estate practices and deemed it necessary to form an entity that could ensure not only democracy in the real estate industry but also in housing opportunities. The Founding Members of HREA who were also pioneers in the industry included: J. W. Hubert, J. E. Robinson, J. W. Robinson, Sr., E.J. Hardy, W. O. Bonner, W. W. Robinson, E. S. McCullough, O. J. Polk, Garfield Clark, Roscoe Cavitt and S. D. Jones. The Association effectively executes its mission by bringing together minority professionals in the real estate industry to promote the meaningful exchange of ideas about the business and how to best serve the community.