When 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?