Financial concerns and emergencies are preventing many nonhomeowners from improving their housing situation and, in many cases, from pursuing homeownership, according a new survey by NeighborWorks America.
Additionally, the survey finds that COVID-19 has dealt a financial blow to nearly one in three Americans, many of whom will need a year or more to recover.
"The opportunity to pursue the American Dream of homeownership is still too limited, especially in communities of color across all income brackets," said NeighborWorks America president and CEO Marietta Rodriguez. "NeighborWorks America and the NeighborWorks network work hard every day to open up the path of homeownership to all those who wish to pursue the dream of owning their own home."
NeighborWorks America's 2021 Housing and Financial Capability Survey finds that the rate of homeownership remained the same over the past year. Black homeownership remains the lowest among those surveyed—42% of Black adults own a home, a rate virtually unchanged from a year ago, compared to 69% of white adults and 53% of Hispanic or Latinx adults. Black adults face some of the biggest obstacles to buying a home with 63% saying they don't think they would be approved to buy a home by a bank or credit union.
The survey makes a strong case for credit as a leading cause in widening the gap in homeownership and wealth disparities between Black, Hispanic or Latinx, and white Americans, according to NeighborWorks.
Among all Americans, nearly three in 10 (31%) have had financial applications denied or delayed due to their credit score, including 41% of Black adults, 39% of Hispanic or Latinx adults and 36% of low-income earners. In contrast, just 27% of white adults have had a financial application denied because of a credit score.
These problems are more acute for nonhomeowners—in particular, 43% of Black nonhomeowners have had financial applications denied because of a credit score. Another 36% of nonhomeowners do not know their credit scores, even approximately, including 38% of Black nonhomeowners and 44% of Hispanic or Latinx nonhomeowners; just 34% of white nonhomeowners say the same.
In these difficult times, more Americans say they need guidance on building credit and reducing debt. They also have an increasing interest in financial planning classes, according to NeighborWorks.
The organization enlisted KRC Research to conduct a 15-minute online survey of 1,603 American adults from April 19 to April 28.
NeighborWorks America offers grant funding, peer exchange, technical assistance, evaluation tools, and access to training, as the nation's leading trainer of housing and community development professionals. Is network of 250 organizations provides residents in their communities with affordable homes, owned and rented; financial counseling and coaching; community building through resident engagement; and collaboration in the areas of health, employment and education.