Are Black Homeowners Suffering From Slow Price Growth?

In the Washington Post today, Michelle Singletary writes about the history of redlining and how it has destroyed the value of houses in Black neighborhoods. But then she says this:

“Politicians and advocates have long touted homeownership as the best way to build wealth, saying that over the long term, home values go in only one direction: up,” Tim Henderson wrote in a 2018 report for Stateline, an initiative of the Pew Charitable Trusts. “But since the dawn of the 21st century, that promise has been an empty one for many African Americans.”

The Stateline analysis of federal data found that in nearly 20 percent of the Zip codes where most homeowners are Black, home values had decreased since 2000, compared with only 2 percent in neighborhoods where Blacks were the minority.

That got me curious. There’s no question that homes in majority-Black neighborhoods are undervalued compared to similar homes in majority-White neighborhoods, but do they also appreciate more slowly? Here’s the Stateline data:

It’s true that there are many more majority-Black zip codes that lost value compared to other zip codes. However, there were also more majority-Black zip codes where prices doubled compared to other zip codes. In other words, Black neighborhoods may or may not have appreciated less overall, but they definitely showed more variance. Here’s another study of home buyers in 15 metro areas:

This study finds that Black homebuyers do better, on average, than white homebuyers. Here’s a third study, this one from the Center for American Progress:

At all income levels, Black homebuyers do worse than white homebuyers. Finally, here’s a study based on data from Zillow:

The Zillow data shows that Black zip codes did worse than white zip codes, but only by a modest amount.

So what’s the right answer? The problem is twofold. First, two of these studies look at Black neighborhoods and two of them look at Black homebuyers. Intuitively, it seems like these should yield similar results, but they might not.

Second, these studies were done over four different timeframes: 2000-2017, 2012-2017, 2006-2017, and 2000-2013. I’m skeptical of the CAP figures, since they cherry-picked the peak of the housing bubble as their starting point, which also happens to be the peak of Black homeowner value. If you start at a peak it’s hardly surprising to show a substantial downturn, and sure enough, that’s what they show.

Put all this together, and the answer is: who knows? Your answer will vary depending on what you look at and what dates you choose. However, if I were forced to choose one of these as the most telling, I’d take the Zillow chart since its data covers the entire nation and it provides a useful time series that fits what I know about the bubble-era lending industry—although I’d sure like to see it extended to the present. It shows that over a somewhat longish term, home appreciation has been lower in Black neighborhoods than in white neighborhoods, primarily because of a huge drop following the housing bubble. The culprit here, however, is not Black neighborhoods per se, but the mortgage industry, which oversold to Black borrowers during the bubble and drove prices far higher than even normal bubble standards. That wretched episode has been documented in considerable detail in a lot of places, but you can read a good outline here if you want to learn more.

IT'S NOT THAT WE'RE SCREWED WITHOUT TRUMP:

"It's that we're screwed with or without him if we can't show the public that what we do matters for the long term," writes Mother Jones CEO Monika Bauerlein as she kicks off our drive to raise $350,000 in donations from readers by July 17.

This is a big one for us. It's our first time asking for an outpouring of support since screams of FAKE NEWS and so much of what Trump stood for made everything we do so visceral. Like most newsrooms, we face incredibly hard budget realities, and it's unnerving needing to raise big money when traffic is down.

So, as we ask you to consider supporting our team's journalism, we thought we'd slow down and check in about where Mother Jones is and where we're going after the chaotic last several years. This comparatively slow moment is also an urgent one for Mother Jones: You can read more in "Slow News Is Good News," and if you're able to, please support our team's hard-hitting journalism and help us reach our big $350,000 goal with a donation today.

payment methods

IT'S NOT THAT WE'RE SCREWED WITHOUT TRUMP:

"It's that we're screwed with or without him if we can't show the public that what we do matters for the long term," writes Mother Jones CEO Monika Bauerlein as she kicks off our drive to raise $350,000 in donations from readers by July 17.

This is a big one for us. So, as we ask you to consider supporting our team's journalism, we thought we'd slow down and check in about where Mother Jones is and where we're going after the chaotic last several years. This comparatively slow moment is also an urgent one for Mother Jones: You can read more in "Slow News Is Good News," and if you're able to, please support our team's hard-hitting journalism and help us reach our big $350,000 goal with a donation today.

payment methods

We Recommend

Latest

Sign up for our free newsletter

Subscribe to the Mother Jones Daily to have our top stories delivered directly to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate