Urban minorities experience severe homeownership affordability problems, Fannie Mae research concludesMortgagePress.comMinority housing,Fannie Mae Foundation
On June 23, the Fannie Mae Foundation released research showing
that one in seven African-Americans and one in eight Latinos living
in the 25 largest cities across the nation spent at least half of
their incomes on housing during the 1990s. Census Note 14--A Tale
of Two Cities: Growing Affordability Problems Amidst Rising
Homeownership for Urban Minorities--uses census data to examine
recent trends in homeownership attainment and affordability among
urban minorities. Census Note 14 examines changes between 1990 and
2000 in homeownership rates and severe owner cost burdens (defined
as spending at least half one's incomes on housing) among blacks
and Latinos living in the nation's largest cities. The research
compares trends for urban minorities with changes for urban whites
and national trends.
"The good news is that the last decade was one of the best for
minority homeownership in American history," said Stacey D.
Stewart, president and chief executive officer of the Fannie Mae
Foundation. "The bad news is that the gain in minority
homeownership rates during the 1990s was associated with a
pronounced rise in the share of severe affordability problems for
minority homeowners."
The combined figures for the cities examined indicate that while
the number of Black homeowners expanded by 16 percent between 1990
and 2000, the ranks of Black homeowners paying at least half of
their incomes for housing grew by 39 percent. Similarly, an
impressive 54 percent gain in the number of Latino homeowners was
overshadowed by a 98 percent jump in Latino owners with severe
affordability problems. The findings also reveal that:
†Fully one in five black and Latino homeowners in Los
Angeles paid half or more of their incomes for housing in 2000.
Among the nation's 25 largest cities, only New York City's minority
homeowners experienced comparable rates of severe affordability
problems. †In Washington, D.C., the number of severely
cost-burdened black homeowners increased by more than 50 percent
between 1990 and 2000. In fact, the nation's capital ranked fourth
in the percentage increase in the likelihood of black homeowners
experiencing a severe cost burden. Among the nation's largest
cities, only New York, Los Angeles and Seattle exceeded Washington,
D.C.
†Philadelphia added more than 7,000 Latino homeowners
during the 1990s, an increase of 60 percent. But the number of
Latino homeowners with severe cost burdens increased by 167
percent. As of 2000, 19 percent of the city's Latino homeowners
spent at least half of their incomes on housing. Only Los Angeles
and New York City had higher rates of affordability problems among
Latino owners.
†In Baltimore, rapid growth in severe affordability
problems accompanied a substantial increase in Black homeownership.
Black homeowners with severe cost burdens increased by 75 percent
during the last decade, more than three times the pace of overall
Black homeownership growth.
†In Memphis, there was a 40 percent growth in black
homeownership during the last decade. Unfortunately, the city also
registered a 71 percent increase in the number of black homeowners
paying at least half of their incomes for housing. Between 1990 and
2000, the number of black homeowners with severe affordability
problems increased by 4,000 in Memphis.
†Charlotte, N.C.'s 66 percent increase in black homeowners
far outpaced black homeownership growth in any other large American
city. However, black homeowners paying at least half of their
incomes for housing grew by a much faster rate of 140 percent.
†Between 1990 and 2000, San Diego added 27,000 homeowners.
Latino homeowners accounted for more than one quarter of this
number. Unfortunately, the number of Latino owners paying at least
half of their incomes for housing doubled during the decade.
"The rapid growth in severe homeowner affordability problems
among urban minorities threatens to undermine homeownership gains
among minorities during the 1990s and also threatens the health of
our urban neighborhoods," said Stewart. "The Fannie Mae Foundation
supports emphasizing early detection and remediation of mortgage
repayment problems, property tax relief for low-income homeowners,
homeownership and financial education and counseling, and actions
designed to curtail predatory lending."
This latest research reinforces previous Fannie Mae Foundation
research findings on growing affordability problems for American
households.
For more information, visit www.fanniemaefoundation.org.
