February 21, 2019
March 25, 2019
In recent years, some have questioned the financial wisdom of homeownership and, especially, Black homeownership. This skepticism, especially regarding Black homeownership, is understandable, in part because the mortgage crisis dealt particularly heavy blows to Black homeowners and neighborhoods. However, as the broader housing market has recovered, Blacks have not benefitted as much as they might have due to their relatively low rates of homebuying following the crisis. One persistent concern around the issue of Black homeownership is the notion that home values have not always appreciated as much in the places where Blacks tend to purchase homes. A second, and related, concern is the extent to which Black homebuyers are able to purchase homes outside of majority Black neighborhoods, including in predominantly white neighborhoods. We address the potentially interrelated issues of the segregation of Black homebuying and the appreciation of homes purchased by Blacks in the wake of the crisis. First, using census-tractlevel home value appreciation data, we estimate the 2012 to 2017 appreciation rates of homes purchased by 2012 buyers using mortgages, and break these out by the race and ethnicity of homebuyers in 15 large metropolitan areas. We look at how appreciation patterns vary across the 15 metros. We then examine the ethnoracial composition of census tracts where homebuyers receiving mortgages purchased homes in 2017. We conclude with a set of policy recommendations including enforcing and strengthening consumer protection, fair lending and community reinvestment policies, maintaining and strengthening Federal Housing Administration lending, limiting the degree of risk-based pricing in the mortgage market, providing downpayment assistance, and supporting community development financial institutions.