Buying My Home & Building Black Wealth—A Step Toward Closing the Racial Wealth Gap

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By Parker Gilkesson

A couple of months ago, I achieved one of the biggest accomplishments of my life thus far—I bought my first home. Buying a house is the quintessential American dream. Historically, however, every American hasn’t been able to partake in this dream. As I went through the home purchasing process, I was asked by an older white woman why I would buy a home as a young single woman with no children. She went on to say that houses were burdensome, and renting takes away the stress of homeowner responsibilities. I understood what she was trying to say. However, for me and so many other Black folks, purchasing a home is so much deeper. Property ownership is one of America’s greatest wealth builders. And being part of a community of color that has been deprived of wealth for so long, I don’t have time to wait on a spouse and children to begin my wealth-building journey. As a Black woman, owning my home brings our nation one step closer to closing the racial wealth gap—created through discriminatory policymaking with origins deep in American history. 

Throughout history, African Americans have been systematically excluded from the house-buying process by unfair housing practices, racial discrimination, and unjust compensation practices that have left us unpaid or underpaid. Banks wouldn't give us loans, homeowners and realtors wouldn’t sell us homes, neighborhood associations and neighborhood watches were created to keep us out of neighborhoods, and the properties that we did own have often been stolen or lost to complicated tax laws

Racist policies such as the National Housing Act of 1934 provided legal cover to refuse loans to Black people or anyone else who chose to live in or near a Black neighborhood. This prevented homeownership and decreased home equity in Black neighborhoods, resulting in what we now know as “redlining.” Furthermore, under that housing law, white people were able to buy homes in Black neighborhoods and sell predatory housing contracts—which were similar to rent-to-own contracts but were two to three times what mortgages would cost—to Black folks who wanted to be homeowners. These contracts were so harsh that one late payment could result in termination of the contract without notice and families being evicted from their homes. The benefits from the New Deal, GI Bill, and the National Housing Act of 1934 resulted in a large increase of white homeownership; however, Blacks were excluded. Consequently, over 98 percent of all homeowners were white from 1934 to 1962. 

People who do not own a home are less likely to accumulate wealth. A typical homeowner’s net worth is $195,400, while a renter’s is $5,400. This suggest homeowners are able to steadily build wealth over time as the equity in their homes grows, which allows them more leverage to weather financial emergencies, purchase more property, and save money. In 2019, 42.1 percent of Black Americans owned homes compared to 73.4 percent of white Americans. The homeownership gap often mirrors the racial wealth gap. 

While property ownership is one of America’s greatest wealth builders, it was no accident that we never received our “40 acres and a mule” promised by General William Sherman to formerly enslaved people after the Civil War. President Lincoln’s successor, Andrew Johnson, rescinded that promise in 1865 through his Land Policies and Sharecropping policy. This forced over 4 million former slaves to rent the farmland of their previous master in exchange for a “share” of their crop, a practice better known as “sharecropping.” These stolen opportunities of property ownership have had strong transgenerational implications on Black people—and this is why Black homeownership lags 30 percent behind white homeownership. That’s why my being a Black woman homeowner is such a big deal. This is not just about a quintessential American dream, but about finally receiving the opportunities my ancestors deserved, yet were systemically denied. 

The process of purchasing my home was character building to say the least; however, nothing compares to the feeling of a dream fulfilled. I come from a long line of prophetic Black woman dreamers, and I know that I am the fruit of my ancestors’ wildest dreams. Happy Black History Month!