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The homeownership gap between Black and white Philadelphians persists despite an uptick in the number of Black renters who are able to afford a mortgage, according to real estate giant Zillow.
The finding suggests the metro’s homeownership gap is the result of systemic roadblocks that go beyond income, according to a report released last week. For example, lenders tend to deny more Black applicants seeking mortgage loans, often due to factors related to credit and debt. Black renters also tend to have less access to generational wealth, in part because of the racial homeownership gap.
Senior economist Orphe Divounguy said parents of Black renters are less likely to own a home than their white counterparts, meaning they’re unable to extract equity to help their children with a down payment — what he calls the “Bank of Mom and Dad.”
“We know that transfers from parents to children have had a tremendous impact on helping these young people access that first rung of the homeownership ladder. And so, Black families are at a disadvantage. And so, closing that gap means supporting them, giving them access to down payment assistance programs,” said Divounguy, who authored the report.
In 2022, the homeownership rate among white families in the Philadelphia metro was 75.3% compared to 48.2% for Black families, the report said. The rates nearly mirror the national homeownership split between Black and white families and have remained effectively unchanged since 2012, said Divounguy.
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