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African American Homeownership Rates Hit 50-Year Low, Wells Fargo Steps In

African American homeownership is at a 50-year low

Back in 1968, fair housing legislation was passed nationwide that outlawed discriminatory practices towards minority homeowners. Since then, African American homeownership has been on the rise but has plateaued after reaching almost 50% in 2004. In 2016, it decreased to 41.7%. 

To put this in perspective, African American homeownership hasn’t decreased to this level subsequent to a period in our history when it was legal to have housing discrimination.

This rate is 22 points lower than the national homeownership rate, and 4.6 points lower than Hispanic homeowners. What’s most shocking is the disparity between black and white homeowners — white homeowners have a nationwide rate of 72.2%. 

As evidenced by this low percentage, more and more black families are forced into renting. Not only is this a financial burden, it means that they may not have any additional income for important things such as insurance. Back in 2014, ORC International found that a full 95% of homeowners had homeowner’s insurance but only 37% had renters insurance. This means that African Americans who are renting aren’t protecting their assets in a responsible way, which can lead to a huge economic downfall in case the worst happens. 

So, to fix this growing problem, Wells Fargo has pledged to help raise the African American homeownership rate within the next 10 years. The bank has a goal of creating at least 250,000 African American homeowners by 2027 and would lend around $60 billion dollars in the process. In addition, they will put aside $15 million for financial training services for new homeowners.

How will this money be utilized? Wells Fargo has plenty of different introductory programs for first-time homeowners, such as offering incredibly low downpayment rates for loans, decreased out-of-pocket costs, lenient credit offerings, and credit counseling. 

This isn’t the first time Wells Fargo has gotten involved with promoting homeownership within minority demographics. Back in 2015, they launched a similar plan that is in the process of donating $125 billion to Hispanic homeowners.

Both of these plans will go far in promoting a diverse American homeowner. According to the U.S. Census Bureau, by 2024, three-fourths of American homeowners will be diverse, with 17% likely to be African Americans.

And with the help of Wells Fargo, this will hopefully come true as they are truly dedicated to the cause.

According to Wells Fargo Home Mortgage Regional Manager Tony Garcia, “Wells Fargo believes passionately in the financial and social benefits of owning a home and we recognize we can do more to address the homeownership rates within the African-American community.”

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