THE WASHINGTON POST.
SATURDAY, NOVEMBER 2, 2019EZ12
compared with 28.8 percent for
Hispanics and 14.5 percent for
African Americans, the Urban
Institute research found.The black millennial
homeownership rate fell nearly
10 percentage points during
that time and was the only group to
not experience an increase during
the housing boom.Nearly 85 percent of blacks
who graduated with a bachelor’s
degree in 2016 carry student debt,
compared with 69 percent of
whites with bachelor’s degrees,
according to the Center for
Responsible Lending, a consumer
advocacy group. The nonprofit
organization estimates that the
average black student loan
borrower owes about $34,000
compared with about $30,000
for white student borrowers.Nearly 38 percent of black
students who entered college in
2004 had defaulted on their
student loans within 12 years, a rate
more than three times higher than
their white counterparts, according
to the Brookings Institution.— Troy McMullenCollege, homeownership and black millennials mortgage-ready black millennials
who make more than $100,000
annually, but have delayed or not
considered homeownership, adds
Antoine Thompson, NAREB’s ex-
ecutive director.
Rodney Hampton started home
shopping when he returned to
Dallas in 2017 after getting his
MBA and working in Kansas City,
Mo. The 37-year-old Dallas native
works in financial services and
says he watched home prices rise
sharply over the past few years but
still decided to jump in.
Like many millennials, he lives
in a market where rising home
prices and strong demand are
sidelining many first-time buyers.
According to a NAR study that
examined top millennial housing
markets, younger buyers can af-
ford just 10 percent of the homes
listed for sale in Dallas.
“When you look at listings, you
worry about being priced out of
the market,” says Hampton, who
worked with J. RaShad Thomas of
Star Five Realtors in Dallas to find
a two-bedroom home listed at
$298,000 in Arlington, a city just
west of Dallas that has seen steady
price increases over the past five
years. “You have to factor in af-
fordability, but ultimately I knew
that waiting on the sidelines too
long wasn’t really a smart finan-
cial option for me.”
In Chicago, real estate agent
Sanina Ellison is encouraging
younger buyers to consider multi-
family housing rather than a tradi-
tional single-family home as their
first investment. Ellison, a princi-
pal owner at Chicago Homes Real-
ty Group, says owning a multifam-
ily property generates income and
builds wealth for younger buyers.
“They also offer slow but steady
appreciation which is important
for a first investment,” she says.
Frantz Jacques is working with
Ellison to find a multifamily prop-
erty in emerging areas of Chicago
such as Bronzeville and South
Shore, two South Side neighbor-
hoods experiencing increased de-
velopment. He’s financing the in-
vestment through a Federal Hous-
ing Administration loan, govern-
ment-backed financing that can
be used for properties with up to
four units. He says he has already
looked at several properties and
hopes to make an offer on one
soon.
“This is about building genera-
tional wealth,” says the 25-year-
old account executive at e-com-
merce firm Groupon. A native of
Evanston just north of Chicago, he
graduated college in 2016 and says
homeownership was at the top of
his list after settling in Chicago.
“I grew up in a family of home-
owners,” he says. “So I always un-
derstood the long-term financial
benefits of owning your own
home.”
[email protected]cans with a potential for home-
ownership.
“Wealth building through hom-
eownership is indeed possible and
we need to make that happen,”
Williams says. “And homeowner-
ship represents the tools black
Americans in general, and millen-
nials in particular can use to build
or rebuild their wealth.”
NAREB recently launched a
campaign aimed at getting young-
er people of color to embrace hom-
eownership.
The effort is called House Then
The Car and focuses on communi-
ties that have large numbers of
millennials and Gen Xers who do
not own homes. Car loans are still
preventing African Americans in
this demographic from buying
homes, data from Freddie Mac
show.
The campaign includes en-
hancing financial education, im-
proving homeowner awareness
through online educational cam-
paigns and streamlining the mort-
gage process. The goal is to reachalarm for boosting the minority
homeownership rate as the best
way to build long-term wealth for
black households.”
Despite the bleak housing num-
bers for black millennials, Don-
nell Williams, president of NA-
REB, says he’s optimistic the trend
can be reversed.
He points to Urban Institute
research using Freddie Mac data
showing that black millennials
represent 11.4 percent of the pool
of mortgage-ready applicants in
31 of the country’s largest metro-
politan areas.
This group represents people
below age 40 who don’t have a
mortgage, but have strong enough
credit to qualify for one; a debt-to-
income ratio of 25 percent or less;
and no recent foreclosures, bank-
ruptcies or serious delinquencies.
While the percentage of mort-
gage-ready white and Hispanic
millennials outpace that of blacks
— 19.9 percent and 18.5 percent,
respectively — the figure still rep-
resents 1.7 million African Ameri-many black millennials as more
financially strapped younger buy-
ers struggle to save for a down
payment.
Nearly 85 percent of blacks who
graduated with bachelor’s degrees
in 2016 carry student debt, com-
pared with 69 percent of whites
with bachelor’s degrees, accord-
ing to the Center for Responsible
Lending, a consumer-advocacy
group. The nonprofit organiza-
tion estimates that the average
black student loan borrower owes
about $34,000 compared with
about $30,000 for white student
borrowers.
Nearly 38 percent of all black
students who entered college in
2004 had defaulted on their stu-
dent loans within 12 years, a rate
more than three times higher than
their white counterparts, accord-
ing to the Brookings Institution.
A lack of what’s known as inter-
generational wealth — or being
able to get financial help from a
parent — is also hurting younger
buyers of color, says Alanna McCa-
rgo, vice president for housing
finance policy at the Urban Insti-
tute.
She says parental wealth has
long increased the likelihood of
homeownership among young
adults, but because minorities are
less likely to be homeowners and
have less wealth, they are less
likely to be able to help their chil-
dren with things such as money
for a down payment or closing
costs — often the biggest obstacles
for would-be home buyers.
“This explains part of the rea-
son for the persistent gap in home-
ownership across racial and eth-
nic groups,” McCargo says. “And
it’s another reason to sound theestate.”
Despite a decade of economic
growth in the United States, in-
cluding record low unemploy-
ment and higher wages for black
workers, millennials of color
make up only a small portion of
the overall market for real estate,
data show.
Millennials made up 37 percent
of all home buyers in 2015, lagging
behind homeownership rates of
Gen X and the baby boomers —
the two previous generations, ac-
cording to research from the Ur-
ban Institute. But millennials of
color have homeownership rates
nearly 15 percentage points lower
than their white counterparts.
Between 2005 and 2015, the
homeownership rate among
white young adults was 38.5 per-
cent, compared with 28.8 percent
for Hispanics and 14.5 percent for
African Americans, Urban Insti-
tute research found. The black
millennial homeownership rate
fell nearly 10 percentage points
during that time, and was the only
group to not experience an in-
crease during the housing boom.
Several factors account for the
lower numbers, housing experts
say.
They include a lack of afford-
able housing in some areas and
chronically low inventory in oth-
ers. Some surveys also show mil-
lennials’ shifting attitudes on ho-
meownership in the wake of the
financial crisis.
But like their white counter-
parts, rising student debt is in-
creasingly the biggest hurdle forDEBT FROM T11COVER STORY
Born from 1981 to 1996, the
millennial generation reached
67.7 million this year, according
to the Census Bureau, making it one
of the largest and potentially most-
lucrative demographics in the
country for the real estate industry.Homeownership levels for blacks
fell to 42.7 percent in the third
quarter of 2019 (compared with
64.8 percent for the overall
population), a record low that has
virtually erased all of the gains
made since the passage of the Fair
Housing Act in 1968, landmark
legislation outlawing housing
discrimination, census data show.Millennials made up
37 percent of all home buyers
in 2015, lagging behind
homeownership rates of Gen X and
the baby boomers — the two
previous generations, according to
research from the Urban Institute.
But millennials of color have
homeownership rates nearly
15 percentage points lower
than their white counterparts.Between 2005 and 2015, the
homeownership rate among white
young adults was 38.5 percent, To see more photos of the
Hopkinses’ home search, go to
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