In This Article:
Yahoo Finance's Ronda Lee discusses why Black homeownership is lower than it was a decade ago amid lingering impacts from the Great Recession.
Video Transcript
AKIKO FUJITA: Welcome back to Yahoo Finance Live. Well, we have seen the pandemic leading to huge gains in the housing market, driven by low mortgage rates and tapping into equity from refis. But new numbers point to the fact that Black homeowners have largely missed out on the housing boom. For those trying to enter the housing market, Black homebuyers were denied a mortgage much more often than white applicants. And our very own Ronda Lee is on top of that story. Ronda, I know you've been crunching some of the data that's come out. What did you find?
RONDA LEE: Well, the easy answer is low credit scores. But when you go beneath that, you have lingering effects of the Great Recession. You have low wages due to pay inequality. You have high issue loan debt. You have the fact that Black homes aren't valued the same in appraisal, so they're losing equity. So when you talk about missing out on this, there's multi-layers, and you have to look at all of these, instead of just what happened with their finances or credit cards.
BRIAN CHEUNG: Ronda, it's Brian here. You mentioned the Great Recession. I mean, obviously, we know that what happened more than 10 years ago still has an impact today. What are you seeing in terms of trends among Black homeowners specifically with regards to the residuals of the last crisis?
RONDA LEE: The studies have proven that it just takes the Black communities a little bit longer to bounce back. It took about 10 years from the Great Recession to bounce back. During the housing boom, you had Black homeownership at 48%. Right now, it's 43%. A big problem was during the pandemic, the housing boom, you had a lot of Black homeowners, even those who are the higher earning wages, that were given subprime loans, even though they qualified for better loans.
You had also people who they tried to do some type of relief programs, but the relief programs during the Great Recession were not the same as the mortgage forbearance programs that we had during the pandemic. So people who did relief programs, they couldn't get a home because those programs put a deferred principal. So even if they had equity, they couldn't tap into it during this point in time.
AKIKO FUJITA: Specifically, in mortgage applications, Ronda, you've highlighted the fact that Black applicants were denied at higher rates than white applicants. This has historically been the case, but what are we finding now? Has anything really changed?