Closing the Education/Racial Real Estate Gap in boston
The home-buying process is difficult for everyone in this frenzied seller’s market, but it’s harder — much harder — for Black and brown buyers, like Cruz, who are often shocked to find out just how long and complicated the process can get. Many are the first in their family to purchase real estate.
The National Association of Real Estate Brokers, an organization of realty professionals of color, has documented the widest racial gap in homeownership in 52 years. Seventy-six percent of white Americans own their own home compared with 47 percent of Black Americans, a difference of 29 percent, the group found in its 2020 State of Housing in Black America report. In 1960, eight years before the Fair Housing Act took effect, that difference was 26.8 percent.
Linda Champion is a biracial (Black and Korean-American) lawyer and managing real estate broker with CUE Realty whose clients are mostly low-to-moderate income buyers of color. She said her clients face several major obstacles to homeownership.
“A lack of financial literacy’’ in the industry is one, and this seller’s market is another, Champion said. “The real estate industry is used to seeing a minimum of five to twenty percent down, and in this market there are a lot of cash buyers. Agents don’t understand how Mass. Housing Partnership loans only require 1.5 percent down; [the Federal Housing Administration] requires 3.5 percent. But these offers are seen as weaker than offers with larger down payments. These buyers aren’t even contenders. These loans also take longer to close than conventional loans.