Day: November 14, 2021

The Covid-19 pandemic has changed the nature of homebuying in the United States, but one constant is that Black Americans do not have the same access to a home of their own.

Black purchasers made up just six percent of the total homebuyers this year — a figure that has changed little over the past two decades, a National Association of Realtors (NAR) report released Thursday said.

Pandemic dynamics have allowed many Americans to get caught up on student loans and build savings, since spending opportunities like travel and eating in restaurants were off limits.

As remote work became the norm, more buyers packed up and moved to be closer to family and friends rather than relocating for a job, according to NAR’s 2021 Profile of Home Buyers and Sellers.

However Black Americans are weighed down by student loan debt to a greater degree than their white counterparts, and less able to get help from family, the report said.

“Unfortunately, race hasn’t really changed much this year. We’re still seeing pretty consistent, low shares of minority homebuyers,” NAR’s Jessica Lautz told AFP in an interview.

While low interest rates made mortgages more accessible, the now-chronic shortage of homes for sale has driven prices higher and kept many first-time buyers out of the market, the data showed.

Even in the South, Blacks made up just nine percent of homebuyers in a region where their population in some states is more than double the 13 percent national average, the report said.

Prior NAR research shows white homeownership rates are 30 percentage points higher than those of Black buyers, who are more than twice as likely to have student loan debt and a higher amount, and are rejected for mortgages at more than twice the rate as white applicants.

And because they are less likely to own homes, they are not able to use proceeds from the sale of a home to finance a purchase.

Priced out

While the share of first-time buyers rose this year, it remains below the historic norm of 40 percent, said Lautz, NAR’s vice president of demographics and behavioral insights.

“We know that first-time homebuyers are struggling to enter into this housing market,” she said, adding they find it hard “to pull the money together and then to be able to compete with other buyers” who increasingly can pay all cash.

With historically low inventory — exacerbated by a shortage of workers and supply issues and tendency for builders to focus on large, expensive houses — sellers are getting full asking price and more for their homes, and a higher share of buyers can pay cash.

The median home price was $305,000, more than $30,000 higher than in 2020, according to the report.

President Joe Biden has made lowering home prices a plank of his Build Back Better bill under consideration in Congress, calling for $150 billion for “the single largest and most comprehensive investment in affordable housing in history.”

His plan would offer down payment assistance to help more buyers own their first home and build wealth, and focus on zoning reform to allow more construction.

Close to family

One of the biggest shifts during the pandemic has been the increase in demand for work-from-home opportunities as offices shut down.

“Home sellers are saying their number-one reason to sell is to get closer to friends and family,” Lautz said. “People really wanted their support system around them and needed it during the pandemic.”

Job relocation as the reason to move fell to seven percent from 11 percent.

She said she expects that trend to continue “as CEOs understand if they want to retain talent, they may need to allow more flexibility in working from home.”

Another trend is the dwindling share of homebuyers with children, which fell to 31 percent — the lowest on record, she said.

That shifts priorities, since those buyers will be less concerned about issues like schools or larger homes, which for cash-strapped buyers will “open up neighborhoods for them that would have been off limits if they had children in the home.”

Source: Voice of America

The top White House economic adviser on Sunday acknowledged the pain for Americans of sharply rising consumer prices, saying that President Joe Biden remains open to the possibility of tapping the U.S. Strategic Petroleum Reserve to ease spiraling gasoline prices that motorists are paying at service stations.

“There’s no doubt inflation is high right now,” Brian Deese, director of the National Economic Council, told NBC’s “Meet the Press” show. “It’s affecting Americans’ pocketbooks. It’s affecting their outlook.”

U.S. consumer prices jumped at an annualized rate of 6.2% in October, the biggest increase since 1990, the government’s Labor Department reported last week.

Higher energy and food prices have affected consumers the most, with consumer spending accounting for 70% of the U.S. economy, the world’s biggest.

Fuel costs for motorists are up sharply over the last year, with motorists now paying $3.30 a gallon (3.8 liters), $1.08 more than a year ago, the highest average price since 2014. The cost of grocery bills has risen 5.3% over the last year, with beef prices increasing markedly, further pinching household budgets.

Deese offered no immediate solution for the higher consumer prices, but said economic forecasters expect the inflation rate to decrease in 2022.

He said “all options are on the table” to curb rising prices, including tapping the Strategic Petroleum Reserve, where the U.S. currently has 612 million barrels of oil stored in four salt caverns along the Gulf of Mexico coast.

Some release of the reserve oil could be refined into gasoline for sale to motorists, which could in the short term ease gas prices at service station pumps. But U.S. presidents have only reluctantly tapped the reserve, instead holding it for use in the event of a possible true national emergency, such as a cutoff in Middle East and north Atlantic oil production.

The existing oil reserve is enough to replace more than half a year’s worth of U.S. crude net imports.

Deese said three things have to occur to improve U.S. economic growth and curb inflation.

”One, we have to finish the job on COVID,” he said, with more vaccinations to curb the spread of the coronavirus that causes the illness. “We have to return to a sense of economic normalcy by getting more workplaces COVID-free; getting more kids vaccinated so more parents feel comfortable going to work.”

But Biden’s mandate that 84 million U.S. workers be vaccinated at workplaces with 100 or more employees has been at least temporarily blocked by a U.S. appellate court pending further court hearings.

Secondly, Deese said, “We’ve got to address the supply chain issue” of consumer goods arriving into the U.S. from Asia, with 83 container ships currently anchored off the Pacific Coast waiting for docking and unloading.

He said the $1.2 trillion infrastructure legislation Biden is signing Monday will help ease transportation bottlenecks in the U.S., but that construction work does not occur overnight.

Lastly, he called for congressional passage of Biden’s nearly $2 trillion social safety legislation to provide more financial, educational and health care assistance to all but the wealthiest American families. The House of Representatives is planning to vote on the measure this week, but its fate in the Senate remains uncertain.

Despite the immediate inflationary pressures on American consumers and Biden’s sharply declining voter approval standing, Deese said the economy has sharply improved since Biden took office last January.

“When the president took office, we were facing an all-out economic crisis,” Deese said. “Eighteen million people were collecting unemployment benefits. Three thousand people a day were dying of COVID. And because of the actions the president has taken, we’re now seeing an economic recovery that most people didn’t think was possible then.”

“Economic growth in America is outstripping any other developed country,” Deese said. “And the unemployment rate has come down to 4.6%; that’s about two years faster than experts projected.”

But with higher consumer prices, the Democratic president’s Republican political foes are focusing on American pocketbooks as congressional elections halfway through Biden’s four-year presidential term loom in November of next year.

One Republican critic, Senator John Barrasso of Wyoming, told ABC’s “This Week” show, he would never have believed Biden would preside over the biggest increase in consumer prices in three decades.

But Barrasso blamed what he characterized as Biden’s “almost irreversibly bad” federal government spending choices, both for infrastructure and the pending social safety legislation.

The infrastructure legislation was approved with both Republican and Democratic support, but no Republicans have voiced support for the social safety net measure, forcing Democrats to attempt to pass it with their own votes.

Source: Voice of America