Although progress has been made in last decade, racial disparities are wide in U.S. housing market
Alan J. Heavens
Despite progress made over the last decade, the percentage of minority homeowners still lags far behind the national average.
''Racial disparities in housing are alive and well in the United States,'' said Stuart Gabriel, director of the Lusk Center for Real Estate at the University of Southern Californiacolor> at Los Angeles. ''It signals that something is wrong in this land of plenty.''
Yet the real estate industry is pinning its hope for the future on minority and immigrant buyers.
''Immigrants typically provide an initial stimulus to rental markets for their first few years in the United States,'' said Michael Carliner, an economist for the National Association of Home Builders. ''After becoming established, they become a major factor in the for-sale marketplace.''
Since the 2000 census, ''it appears that immigration has accelerated, with a net of about 1.5 million new immigrants coming to this country annually since the beginning of this decade,'' Carliner said.
The builders' association's forecast of populations and household formations projects a net flow of as many as 1.7 million foreign-born people coming to this country every year between 2002 and 2012.
Labor demands created by the retirement of baby boomers are likely to provide economic and political influences supporting immigration, Carliner said. And because of the demographic changes projected for the next decade, the long-term outlook for construction of single-family homes is expected to be more favorable than it was during the last decade.
Considering that Asia and Latin America are the chief sources of immigration, concerns about the lagging minority homeownership rate run deep.
Homeownership opens the door to success for immigrants and minority groups in America, Gabriel said.
''It is the primary wealth-creating vehicle in the United States,'' he said. ''Elevated homeownership among minority households would boost their wealth and economic status.''
Gabriel, who spoke to a meeting of the National Association of Realtors in San Francisco in November, said the substantial gap exists even though the Bush and Clinton administrations have strived to close it.
''In 2002, the Bush administration announced a policy goal of adding 5.5 million minority homeowners by the end of the decade,'' he said. ''Under Clinton, the Department of Housing and Urban Development specified a national homeownership goal of 70 percent (it's now 68.4 percent), which implied a 15 percent reduction in the gap between whites and minorities.''
Government policy over the last 75 years has made housing more affordable, with the creation of the Federal Housing Administration in the 1930s, fixed-rate mortgages, deductibility of mortgage interest, and the secondary mortgage market.
''Yet despite changes in federal mortgage policy over the last 20 years, this gap of 25 to 30 percentage points between Anglo and minority homeownership hasn't changed at all,'' Gabriel said. ''And racial segregation of neighborhoods remains high in metropolitan areas.''