Time to Rethink Black Homeownership ?
President Obama unveiled a housing-crisis plan , but he may have missed another solution .
Yesterday in Phoenix , President Obama delivered a major speech on his solutions for addressing America ’ s housing crisis in his second term . In addition to announcing plans to target Fannie Mae and Freddie Mac , he summarized his primary solutions as follows : “ Helping more Americans refinance . Helping qualified families get a mortgage . Reforming our immigration system . Rebuilding the hardest-hit communities . Making sure folks have a decent place to rent .”
But one question his speech left unanswered is whether or not one key solution is being overlooked : Should we encourage fewer Americans to pursue the dream of homeownership ?
Rethink Black Homeownership Barack Obama Housing Crisis Plan Keli Goff Orlando , Florida August 2013
President Obama and his advisers have made it clear that they still consider homeownership a significant component of the American dream . The Los Angeles Times quoted a senior administration official as saying , “ Housing and homeownership are one of the cornerstones of the middle class ,” and in his speech the president cited “ a home to call your own ” as one of “ the cornerstones of what it means to be middle class in America .” But homeownership , and ultimately foreclosure , has played a large role in setting much of black America back financially in recent years .
According to the Pew Research Center , “ In percentage terms , the bursting of the housing market bubble in 2006 and the recession that followed from late 2007 to mid-2009 took a far greater toll on the wealth of minorities than whites .” Pew also noted that “ These lopsided wealth ratios are the largest since the government began publishing such data a quarter century ago .”
So if much of black America ’ s wealth was wiped out when the housing bubble burst , is it possible that it is time to reconsider defining the black American dream primarily through the lens of homeownership ?
Time magazine explored the question of whether or not homeownership remains a worthwhile investment in the American dream in an article titled “ A Nation of Renters .” The article noted that “ housing economist Robert Shiller has pointed out time and again , in the long run , real estate just isn ’ t that great an investment .”
“ I still do believe , as do most Americans , homeownership is an integral part of the American dream and is worthy to be pursued ,” said financial adviser Lynnette Khalfani-Cox . The author of Your First Home : The Smart Way to Get it and Keep it , Khalfani-Cox cautioned that while a worthy pursuit , homeownership should be evaluated with the same cautious eye that more Americans are now using to reconsider the cost of a college education .
“ The vast majority of people who are homeowners , especially African-American homeowners , have to borrow to purchase a home . So the dream is still there , but it is battered and bruised .” Khalfani-Cox , who is the founder of
AskTheMoneyCoach . com , also highlighted something that the president touched upon in his speech , which is responsible homeownership . “ There are rights and responsibilities that go along with homeownership ,” she said . “ It is ill-advised and foolish to enter into homeownership until you are adequately prepared for it .”
For instance , she noted that many homeowners fail to calculate just how much homeownership costs in the long run . Many assume that if they have enough for a down payment , they have enough money to become a homeowner . Those people often find themselves underwater financially when an unexpected expense arises , from a major repair to a job loss . Before they know it , they have become another casualty of foreclosure . But aside from that , Khalfani-Cox pointed out something that few do : Not everyone needs a home .
“ The same way we recognize that college isn ’ t for everyone , we have to acknowledge homeownership is not for everyone . Some people are going to choose not to have a spouse or children so they don ’ t need a large house . Others will travel extensively for work or may be climbing the career ladder and moving every couple of years , and others may just want more flexibility , and there is less of that in homeownership .”
Despite considering homeownership a valid component of the American dream for many Americans , Khalfani-Cox did say that Americans would benefit from expanding the definition of the American dream beyond marriage , kids and a home to more individualized dreams .
“ Overall we have collectively bought into this one-sizefits-all mentality when it comes to the American dream , without recognizing we are a rich mosaic of people of different interests , pursuits and financial outlooks and desires and appetites .” She concluded , “ Homeownership and getting an education are prominent parts of how we define the American dream , and collectively we ’ re rethinking that .”
By Keli Goff , The Root ’ s Special Correspondent .