Why the Stock Market Is Better Than Homeownership for Black Wealth – Business Insider
  • Economic discrimination against Black Americans can take many forms, including home buying.
  • Data shows that a drastic loss of Black wealth took place during the subprime mortgage crisis.
  • Financial advisor Kevin Matthews thinks the stock market is better for building Black wealth.

About two weeks ago, the New York Times published a story about a history professor named Nathan Connolly and his wife who put up their Baltimore home for an appraisal and received a value of $472,000. 

After Connolly removed any indication that the home is owned by a Black family and had a white colleague stand in for him during the appraisal, the value of his home suddenly shot up to $750,000. Connolly has since filed a lawsuit against the appraiser.

According to Kevin Matthews, a financial advisor with a financial literacy platform called Building Bread and author of “From Burning to Blueprint: Rebuilding Black Wall Street After a Century of Silence,” this kind of discrimination against Black homeowners is unfortunately quite typical.

“When I read that story and then shared it on my Facebook page, one of the responses was, ‘this is not news to Black people’ — and it’s not,” Matthews told Insider. 

This year, the National Association of Realtors released data that indicated that while over 64% of all Americans own a home, only 42% of Black Americans own a home in comparison to almost 70% of white Americans — a gap of almost 30%. 

Furthermore, their data also indicated that Black applicants for mortgages are 2.5 times more likely to be rejected as opposed to white mortgage applicants. This can have a really detrimental impact, because homeownership is a common way that families build generational wealth, and is an opportunity for households to have access to equity.   

In a conversation with Insider, Matthews also shared that he has actually experienced this kind of discrimination first-hand, while helping his in-laws with the sale of their house a few years ago. 

According to Matthews, his in-laws had been trying for a while to sell their home with no luck, but after removing family photos and other indications that the property was owned by a Black family, the property sold within two weeks. 

A history of economic disenfranchisement 

Matthews is a native of Tulsa, Oklahoma where an infamous massacre took place in 1921 that was directly aimed at disrupting Black wealth. The massacre took place in an African-American district of Tulsa known as Greenwood, which was one of the wealthiest Black communities in the United States at the time, and sometimes referred to as “Black Wall Street.” 

On May 31, 1921, a young Black man has been accused of assaulting a young white …….

Source: https://www.businessinsider.com/stock-market-better-than-homeownership-black-wealth-2022-8