The start of the home buying season has kicked off and there aren’t many areas in the country more active than the District where, with low inventory, it’s clearly a seller’s market.
“The average home in D.C. is on the market for eight days or less,” said John Jones of the District-based Wells Fargo Home Mortgage.
“D.C. as a whole is starting to see great pockets of growth around Union Station and the U-Street Corridor,” Jones said. “Northeast and Southeast, particularly by Nationals Stadium is completely evolving and folks are concerned about amenities, access to transportation, restaurants and schools and they’re making their homebuying decisions based on those things.”
For first-time homebuyers, it’s important that they have done some preparation before applying for a home loan, Jones said.
“They should use the resources around them like counseling agencies, the city government, and the internet to educate themselves. Education is key,” Jones said.
Potential new homeowners should also know that from a regulatory standpoint, little has changed this year — there aren’t any rules to hinder anyone from buying, Jones said.
However, they should recognize the ever-changing interest rates.
“Interest rates on a typical 30-year mortgage 18 months ago hovered in the low- to mid-3 percent. Now the National Mortgage Association says by the end of the second quarter this year [June], the rate may be about 4.6 percent and, by the fourth quarter of 2019 be at 5.4 percent or so,” Jones said.
“That’s a huge amount of additional interest, so being aware of this is important.” he said.
“Homeownership is the foundation for a family’s financial success and it provides so much more than shelter,” said Mark Alston, the Public Affairs Committee Chair at the National Association of Real Estate Brokers.
“It tends to be the initial genesis of generational wealth, the engine that can fuel business creation, educational opportunity and retirement security. Black homeownership is even more foundational in that it stabilizes neighborhoods, gives a sense of accomplishment, provides people who have been historically cut out, the pride of ownership,” said Alston, who’s also a broker and owner of Alston & Associates Skyway Realty, in Los Angeles.
In 2018, 50 years after the signing of the Fair Housing Act of 1968, the percentages of Blacks owning homes [42.1 percent] is statistically the same as it was in 1968.
The gap between Black and White home ownership is higher today than it was then, over 30 percent with White ownership at 72.4, Alston said.
While other ethnicities are increasing in home ownership percentage, Blacks have generally been in decline since the high of 49.1 percent in 2004, he said.
“There are no new programs today that sufficiently address this gap, or decline for potential Black home owners, Alston said.
“Risk-based underwriting and pricing models have created an environment where those who have less, pay more. There needs to be an assertive, aggressive push in our policymakers’ agendas to promote and support homeownership opportunity for all Americans, not just the affluent,” he said.
Wells Fargo continues to work toward overcoming the public relations disaster that alleged the company discriminated against Black and Latino homebuyers in Sacramento, California, by pushing them into more expensive mortgages than White borrowers.
In 2017 Wells Fargo announced a $60 billion lending commitment to create at least 250,000 African-American homeowners by 2027.
“Wells Fargo’s $60 billion lending goal can contribute to economic growth by making responsible homeownership possible for more African Americans in communities across the country,” Brad Blackwell, executive vice president and head of housing policy and homeownership growth strategies for Wells Fargo, said in a statement.
“We are proud to be the first mortgage lender to make a public commitment to help increase African-American homeownership. And, we are grateful for the support of key housing and civil rights organizations, who work alongside us to increase economic prosperity in our communities,” Blackwell said.