Navigating housing market boom as a Black American isn't a walk in the park for 30-year-old San Diego justice system employee Benyard. Even in one of California's hottest real estate markets, where the median price for a single-family home hit an astounding $860,000 in 2017, Benyard struggles to compete.
"I got beaten out, significantly beat out," Benyard told CNN Business recently. "I go to a lot of different places... I'll look at something and the next day it's gone."
Benyard is part of a growing group of Black Americans who've been left behind during the so-called "pandemic-fueled housing boom." Before the pandemic, Black home ownership rates were slowly growing – a small, but significant, economic bright spot amid racial inequality. However, the pandemic halted this upward trend.
"The market is very competitive right now," Benyard said. "The price is very high."
San Diego's Unique Hurdles
According to a recent analysis by the Center for American Progress, a liberal think tank, Black homeownership rates in the U.S. ended last year at just over 44% – a slight change compared to 2019. White homeownership rates, on the other hand, increased from 73.7% to 74.5% during the same period.
"Despite historically low mortgage interest rates, Black home ownership during the pandemic has grown more slowly than that of white households," the study's authors wrote. "Simply put: Black homeowners have struggled to become and remain homeowners, with more barriers due to fewer resources they can rely on."
This inequality is evident in Benyard's hometown of San Diego, one of many cities flooded by affluent tech buyers during the pandemic. Despite having higher-than-average household income, the low-cost housing market is challenging for many new home buyers.
The median house price in San Diego County, while still lower than in cities like San Francisco, experienced a significant increase in July, reaching over $1.5 million, according to Zillow data.
Nonprofit organizations worry that the trend is hurting all first-time buyers in the area, although they fear it could worsen the racial wealth gap in the city, citing 2018 data showing that 61% of white households in San Diego owned their home, compared to 30% of Black households.
"There's obviously a large disparity," said Pamela Gray Payton, vice president for Community Impact at the San Diego Foundation, talking with CNN Business. "It's hard to break into the market if you're not already there."
Pandemic's Indirect Effects
Black Americans are overrepresented in low-wage service jobs, which have been hit hard by layoffs due to the pandemic. Black Americans also typically carry a higher student loan debt burden, earn less, and save less, on average.
The Center for American Progress study pointed out that the U.S.'s history of redlining and mortgage discrimination has resulted in Black households, on average, having less wealth – making it less likely for young Black Americans to rely on their parents for mortgage down payments.
"It's just another symbol of all the different economic pressures that Black people are facing," said Christian Weller, senior fellow for Economic Policy at the Center for American Progress and one of the study's authors.
"They lose their jobs faster than whites. They stay unemployed longer. They have less savings, which means they have less money for a down payment." This can all add up quickly for Black homeowners.
Today, almost a quarter of house buyers are investors with no mortgage – a trend that benefits wealthier Americans, who tend to be white. According to the National Association of Realtors, 82% of Americans who bought homes between April and July of last year were white.
A 2020 study by the National Association of Realtors revealed that only 9% were Hispanic, 8% Asian, and 5% Black.
"There's only a small portion of the economy that can afford to pay all cash and push the prices up to where they are now," said Jessica Lautz, vice president of Demographics and Behavioral Insights at the National Association of Realtors. "We see that a large portion of that is white."
Assistance for Potential Home Buyers
Justice system employee Benyard received help in his search for a new home more recently.
In July, the Urban League of San Diego County, a local branch of the national civil rights organization, informed Benyard that he had been selected for one of several down payment assistance programs offered by the organization as part of their Black Home Buyers Program.
Qualified Black residents of San Diego County who satisfy the program's income, employment, and credit requirements and complete the Urban League's homebuyer education course can receive more than $70,000 in down payment assistance.
Abdullah, the COO of the Urban League of San Diego County, said the program's goal is to close the racial wealth gap in the city by helping Black residents become homeowners but needing help competing with wealthy buyers.
"It will help them get over the finish line," Abdullah told CNN Business. "They can work as hard as they want, but saving $70,000 for a home purchase is very difficult, if not impossible."
[1] RAND Corporation: [2] Redfin: [3] Zillow: [4] Center for American Progress:
