Housing Inequality in America

How Does it Work

     In order to have a conversation about how housing inequality has impacted African American wealth creation there needs to be an understanding of how a home impacts wealth. We have all heard the cliché, but how exactly does homeownership increase wealth? The answer may seem complex, but it can be broken down in three key concepts. Ben Hecht, President and CEO of Living Cities writes in a 2017 Huffington Post article the three keys to understanding. A home appreciates, it is enhanced by leverage, and a home is forced savings.

     Real estate appreciation simply put is the increase of a property’s value over time. There are a variety of factors that contribute to such an increase, and the same factors can cause a home to lose value as well. The 25-year average appreciation rate of U.S. homes is 3.9%.  Factors that contribute to home value appreciation are:

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