How do we make real progress on the homeownership gap?

How do we make real progress on the homeownership gap?
Secretary of Housing and Urban Development Marcia Fudge delivers remarks during a press briefing at the White House in Washington, U.S., March 18, 2021. REUTERS/Carlos Barria

First, let’s set the record straight. Homeownership is critical to wealth creation, especially for establishing intergenerational wealth in America. When looking at net worth, even considering the fact that there can be periods of volatility, the ability for Americans to own a home has proven to be the best method for establishing a financial reserve for passing onto the next generation and to tap into for other financial needs.

The debate that has occurred over the decades about renting vs. owning is answered with data. But it is true, not all should own or perhaps are able to own. But if you are able own a home, can qualify and commit to ownership, there is a strong argument to support doing so.

One of the conundrums of homeownership is that it is limited to certain individuals meeting the necessary criteria. Unfortunately, in the U.S., these limits often reflect the ethnic divides that make up the nation. Today, white non-Hispanic homeownership rates are above 70%, while Hispanic and Black rates sit in the sub 50% levels. For Black homeownership in particular, there has been little improvement in the homeownership rate at all.

I would argue that public policy has actually eroded the strength of forceful leadership needed to make any dent in this area.

An effort to address this gap is once again being discussed by the new administration. President Biden, in fact, had a plank in his campaign calling for a $15,000 first-time homebuyer tax credit. The proposal has been met with resistance in a variety of policy arenas where the debate over the lack of single-family inventory for sale raises concerns that a tax credit would simply exacerbate the already challenging environment that some argue is artificially inflating home values.

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