Barriers to Home Purchase for African-Americans and Hispanics in Syracuse

Abstract

African-Americans and Hispanics in Syracuse, New York, have lower homeownership rates than whites with comparable incomes, despite the availability of affordable housing. Using ethnographic methods, the study team examined home purchase by Hispanics and African-Americans as a multiphase process. Very few of the more than 100 households interviewed by telephone and in person had home-purchase experiences that paralleled the conventional process. They generally found homes through word of mouth rather than Realtors, and many encountered obstacles to finding, purchasing, and financing homes. Alternatives to conventional financing were relatively common, especially after 1975, and portfolio lending became increasingly important for African-American homebuyers. Barriers to homeownership included employment uncertainty, lack of understanding about the homebuying process, strict credit requirements, and cultural misunderstandings. African-Americans and Hispanics in Syracuse have a lower rate of homeownership than whites, despite a relatively affordable housing market. In our efforts to understand why this is so, we began by examining the process of buying a house. We found that most members of the Syracuse housing industry, such as lenders, Realtors, appraisers, and attorneys, share an understanding of the “normal” stages in that process and of the components of a standard, low-risk mortgage loan. We use the term “cookie-cutter” to describe that process: Someone with sufficient income decides to buy a single-family home, saves enough for the downpayment, and finds the house through a Realtor or an advertisement. A Realtor helps to negotiate a market-rate price with the seller, the prospective buyer goes to a local lender for a mortgage, and the closing takes place 60 days later. This normative model seems to be based, perhaps unconsciously, on the experiences of middle-class white homebuyers. Using telephone and in-depth personal interviews with homeowners and renters, we also found that within our study population of a little more than 100 households, very few have had home-purchase experiences that match the “cookie-cutter” stereotype. AfricanAmericans and Hispanics interviewed most commonly found the homes they bought