Screen Shot 2015-10-14 at 10.50.53 AMWhen it comes to homeownership, most people feel as though it’s a status symbol and a way to show that you’ve ‘made it’. But a new study shows homeownership isn’t that profitable if you’re black.

“Becoming a homeowner was not a fruitful asset accumulation strategy for low- and moderate-income black families in the 2000 decade, in either the short- or medium-term,” write Sandra J. Newman and C. Scott Holupka, authors of a new study from Johns Hopkins University.

“They say that in real estate timing is everything but blacks had a loss across the decade — even when their purchase time was impeccable,” Newman said. “They would have done better if they’d stayed renters.”

During the 2000’s black homebuyers lost more in the housing market than white people. And if they would have rented instead of buying, they would have been better off.

According to the study, if black families would have bypassed homeownership, they would have moved from negative to positive net worth. In two years, between 2005 and 2007, wealth would have increased to $1,300, and it would have hit $2,700 by 2011.

To some, $2,700 may not seem a lot, but in the grand scheme of things, is homeownership really worth it? During the housing crisis, in areas like Prince Georges County, Maryland, the biggest population hit with foreclosures were black homeowners. Whether it was because of living above their means, or the job market also taking a hit, even till this day, if you drive through the McMansion neighborhoods in PG County, the amount of homes for sale due to foreclosure is ridiculous.

Clutchettes, do you rent or are you planning to purchase a home? If you have already purchased a home, do you regret it?

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  • The study is blatantly misleading, offensive, and it insults the intelligence of black people. Homeownership is a must in our community. A strong home with great equity and other forms of investments can cause family stability and those resources from a home can pass on to future generation. The deal is that many mortgage banks and other financial entities discriminated against many black people and exploited poor people (via ridiculous pay day loans, etc.) in order for these banks to gain profits. The massive foreclosures in our community during the Great Recession are not about the negation of the need of homeownership for black people. That was about the need for us to eliminate economically corrupt policies from many big banks in the first place. All of us should never be permanent renters. We want our financial credit to be strong. We want real economic strength where our debts our paid off, and we want the poor of our people to experience economic justice. I echo the sentiments of the brilliant commenters here. You will notice that the study will not expose the racist and classist nature of gentrification or how racism is found readily in renting industry (as documented by an article by Jamelle Bouie entitled, “A Tax on Blackness: Racism is still rampant in real estate”). If it wasn’t for criminal actions of numerous big banks and discrimination, black homeownership would flourish in another level in our generation. So, I do encourage more black homeownership. Housing rights is a human right.

  • CoolChic

    Misleading and racist study.

  • Me

    I’m so honored to be surrounded by KNOWLEDGEABLE black folks. Y’all already know how racist this article is and made all the points I was gonna make. Stay woke y’all. The one thing black folks cannot afford to give away is homeownership. That should always be priority number 1. Own your home AND PAY OFF YOUR MORTGAGE ASAP. Equity rules.

  • Chazz A

    This study is loaded with bias and BS and should not be taken seriously. There are some great comments posted on this topic.
    As a home and property owner, I can only add the importance of a solid credit history, personal capital, knowledge of local market trends and most importantly, extensive knowledge of banking procedures in terms of loan options.
    IMO, renting has advantages on a short term basis. However, long term is not feasible because the renter is not generating wealth in equity.
    Predatory lending (I call it loan-sharking) and the banker-induced recession, caused many black families to lose their homes by handing out ARM’s and Balloon mortgages like cheap Halloween candy!
    We must keep in mind that paper money is not backed by gold. The only reason it has value is because the Fed recognizes it as legal tender. Therefore, large amounts of money can be printed from literally nothing, without a tangible reserve. The banks loan out the extra money and charge interest (fractional reserved banking). In fact, big banks can legally loan 10 times the amount of money than they have on tap! This is a recipe for greed, bias and was one of the leading causes of the 08′ housing market crash.

  • don juan

    Of course the study shows this.