By Shannon Horton
As a top-producing real estate broker, I understand the long-term implications of waiting for the “right or perfect time” to become a part of the American dream. The “right or perfect” time is NOW when it comes to purchasing your home! From a historical perspective, racism and discrimination have resulted in a gap for people of color. There is no doubt that years of unfair policies and discrimination has had a major impact in the lack of Black homeownership. According to recent reports, a gap exists between Black and White homeownership rates of about 30% (60.8% for whites, 42% for Blacks). Nationwide, 43% of Black households can afford to buy the typical home compared to 63% of White households.
In general, Blacks have less income and less wealth, and therefore usually buy homes at lower price points.
Owning a home is one of the main drivers of wealth in this country, particularly across generations, which makes increasing Black homeownership a critical goal in addressing the overarching racial wealth gap in America.
Financial literacy, education, and entrepreneurship are useful skills but won’t build wealth unless people of color become homeowners. Here are four reasons why people of color should purchase a home now:
• Home Equity Builds Wealth – Home equity is a large percentage of most families’ wealth. The federal government subsidizes home equity in ways not available to other forms of wealth building. The government also provides tax advantages. Homeowners can deduct the mortgage interest and property taxes from their income taxes. In most cases, homeowners don’t have to pay taxes on the capital gains from selling their homes. Instead, they can exclude capital gains from taxable income. The bottom line is that sustainable homeownership provides wealth accumulation for owners.
• Owning a home promotes intergenerational homeownership – Research shows that children of homeowners transition to homeownership earlier — lengthening the period over which they can accumulate wealth.
• Home Prices will continue to increase – Over the last 20 years, the cost of being a homeowner has continued to rise. The homes that are being built and on the market are high-cost homes that create additional challenges for Black families looking to buy a home. Home prices are expected to increase in cost!
• Purchasing a home is POWER – Buying a home expands your options for the future, whether you plan to sell and make a profit or leverage the equity in your home to pay for other major expenses. You do not necessarily need a 20% down payment. Many homebuyers can qualify for a multitude of low and no-down-payment mortgage programs, and some of these programs aren’t just for first-time buyers.
Invest in yourself, homeownership equals racial equity for our communities. If purchasing your home is your goal in 2021 dream, make it a reality today!
For most people, buying a home is the biggest purchase/investment that they’ll ever make and it should not be taken lightly. When it comes to successfully navigating the local, real estate market, knowledge, experience and attention to detail are the traits in a real estate agent that can make the difference between owning the home of your dreams or settling for the next best thing.
Contact me today at (206) 769-0925 or email@example.com and let’s have a conversation about what you’re looking for in a new home and how we can help that dream become a reality.
Shannon Horton Real Estate Services is an award-winning, experienced real estate broker that services clients in King and Pierce Counties.