According to a recent study by the Massachusetts Institute of Technology (MIT), Black Americans are still paying more than any other group to own a home.
The study shows that Blacks, on average, are paying an annual difference of $743 in mortgage interest payments, $550 in mortgage insurance premiums, and $390 in property taxes, a disparity that over 30 years contributes to roughly half the current $130,000 gap between Blacks and Whites in savings and retirement.
The study shows that if the difference in annual payments was invested for 30 years, it would result in savings of $67,320 for Black homeowners.
The study, called “The Unequal Costs of Black Homeownership”, is lead by Edward Golding, the executive director of the MIT Golub Center for Finance and Policy. Golding said these inequities make it impossible for Black households to build housing wealth at the same rate as white households.
Black homeowners on average have lower credit scores and lower down payments, largely rooted in past discriminatory policies and practices, making them disproportionately disadvantaged by risk-based pricing, the study found.
Golding, a former head of the Federal Housing Administration, said in a statement that “mortgages costs are determined by markets to some extent,” but “there is a great deal of public policy that influences these rates especially as it impacts people of color.”