Owning a home is still considered the primary way to get a piece of the American dream by many Black Americans, but many also believe that not only is it currently out of reach, but will be increasingly harder to achieve for themselves and their children, according to a survey by Fannie Mae.
Nearly 62 percent of African Americans surveyed said they still preferred to own a home despite the difficult economy, but 19 percent of those currently renting said the economy will force them to delay purchasing a home.
Seventy-three percent of African Americans also said they thought it would be difficult for Black buyers to get a loan, compared with the general population, and 61 percent say it will become even more difficult for their children to buy a home. In fact, most respondents overall suggested it will be harder for them to own a home than it was for their parents.
The survey also revealed that 66 percent of African-American homeowners have refinanced their homes, compared to 46 percent of the general population who have never done so. Like most homeowners, they trust 30-year fixed-rate mortgages because of the lower risk and the stability of predictable payments.
The national survey of 3,051 people included homeowners, mortgage borrowers, renters and underwater borrowers (those who report owing at least five percent more on their mortgage than their home is worth). An additional 400 randomly selected delinquent borrowers were polled.
Overall, survey respondents cited poor credit, difficulty in affording a home, and a complicated purchase process for not becoming homeowners. Those who are delinquent on their mortgages do not believe it is OK to stop making payments, but many say they have considered default as an option for the financially distressed.
The survey found generally that the public is less likely to view a home as a safe investment. A similar study in 2003 showed that 83 percent thought so, compared to 70 percent in the survey released this week.
“That is one of the big changes we have seen in attitudes. We need to figure out whether this is a sustainable shift,” Doug Duncan, Fannie Mae’s vice president and chief economist, told The Washington Post.
The Center for Responsible Lending (CRL) holds mortgage brokers and banks responsible for much of the weaker outlook for housing, especially lenders who put homeowners in bad mortgage deals, even when the homeowners qualified for less risky loans.
In a recent statement applauding efforts by the Obama administration to stabilize the housing market, the CRL noted that since 2007, there have been 6.6 million foreclosures nationwide and estimated that by 2012, that number may climb as high as 13 million. The result is lower home values and less equity that homeowners could use to help pay for college and retirement.
And more foreclosures means communities have lower tax bases, higher crime, fewer resources for education and more strain on services such as fire and police protection, CRL President Michael Calhoun said.
A year ago, loan servicers fought stronger measures that would have lifted the current ban against home loan modifications through our court system, insisting they could handle the foreclosure problem on their own, Calhoun said. “Today, policymakers and communities hit hard by foreclosures are rightly criticizing service providers for tepid results.”