Democracy in Housing: Why the Black Homeownership Gap Is Wider Than It Was in 1968 and What We Can Do About It

The American Dream has always been anchored to homeownership. A place to raise your family. Stability. Something to pass down. But for millions of Americans, and Black families in particular, that dream has been systematically pushed further out of reach by outdated policies, opaque lending practices, and an evolving marketplace that increasingly treats housing as a profit vehicle rather than a pathway to stability.

I recently had the privilege of sitting down with Ashley Thomas III on Purple Political Breakdown to discuss the state of housing policy in America. Ashley is the National President of the National Association of Real Estate Brokers (NAREB), the nation's oldest minority real estate trade association, founded in 1947 with a mission of "Democracy in Housing." He is also the CEO and Founder of LA Top Broker, Managing Broker of First Security Investment Co., Inc. (one of the country's oldest Black-owned property management firms), and a 2026 Inman Power Player. With over 25 years of industry experience, he brought a level of clarity to these issues that I think everyone in the housing, finance, and policy space needs to hear.

The Gap That Refuses to Close

Here is the headline number: white homeownership in the United States is approximately 72%. Black homeownership is approximately 43%. That is a 29 percentage point gap, which is actually larger than the 28 point gap that existed in 1968 when the Fair Housing Act was signed into law.

Ashley traced the roots of this disparity through specific policy decisions. The 1862 Homestead Act distributed 160 acres to American citizens but excluded Black Americans. The FHA lending programs created under the New Deal in the 1930s directed only 2% of loans to people of color during their first 35 years of operation. The policy framework that built white generational wealth actively excluded Black families from participating. As Ashley put it during our conversation, the same policy that created the gap can be the same policy that minimizes it. But that requires intentionality.

Outdated Underwriting Is Locking People Out

One of the most striking parts of our conversation was about how mortgage qualification has essentially remained unchanged for 20 years despite massive shifts in how Americans earn, spend, and manage money.

Student loan deferment is a prime example. If your loans are on deferment and you owe nothing today, lenders still project what your future payment will be and count it against your debt-to-income ratio. This is the only category of debt on a credit report that works this way. And while future debt is being projected, future income is not. Ashley described this as a fundamental imbalance in underwriting. If lenders insist on projecting future obligations, they should also project reasonable income growth. The current system penalizes borrowers twice: once for having the debt and once for not yet earning what they will likely earn when that debt comes due.

Credit utilization presents a similar problem. The recommended threshold is 30% of available credit. A consumer with a $10,000 limit and a $7,000 balance who has never missed a payment will have a lower credit score than someone at $3,000, even though both have demonstrated identical creditworthiness in the only metric that should matter: payment history. The result is that two applicants with perfect payment records can receive dramatically different interest rates, with the difference between a 620 and 720 FICO score potentially driven entirely by utilization.

Ashley also highlighted how gig economy income, cash-based businesses, and non-traditional earnings are still largely excluded from qualification calculations despite being legitimate and growing sources of American household income.

The Community Property Fairness Problem

Nine states (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin) operate under community property laws. In these states, FHA lending rules require that a non-borrowing spouse's debt be included in the mortgage application. However, that spouse's income is excluded.

Consider the practical impact: a wife applying for a mortgage on her income alone must qualify while carrying both her own debt and her husband's debt, but without any credit for his income. Over 104 million Americans live in these nine states. NAREB's Community Property Fairness Initiative is actively pushing for reform at both the federal and state level, including working with state attorneys general to issue opinions against the current framework.

Institutional Investors and the Inventory Crisis

The United States is approximately 4 million homes short of meeting current demand. A significant contributing factor is that since the 2008 foreclosure crisis, institutional investors have been purchasing entire blocks of homes, converting them into rentals, or in some cases leaving them vacant while the properties appreciate. A recent bipartisan housing bill addresses this by restricting institutional investors from purchasing single-family homes.

Ashley made a point that stuck with me: real estate is the only financial vehicle where the physical asset can deteriorate and still grow in value. An investor can let a home fall apart and still profit from market appreciation. Meanwhile, families who would have lived in, maintained, and built community around that home are priced out or forced into rental markets with no stability guarantees.

NAREB supports the 21st Century Road to Housing bill focused on building new inventory and reducing regulatory barriers. But as Ashley emphasized, inventory alone is not enough. If we build 10 million new homes but the qualification system remains broken, access will still be the bottleneck.

Insurance, Taxes, and the Hidden Costs

Insurance costs are becoming a stealth barrier to homeownership. In Louisiana, Ashley shared that a client's insurance payment actually exceeded their mortgage payment due to claims from natural disasters driving up premiums. He raised the pointed question of whether insurance companies withdrawing from certain areas functions as a modern form of redlining, just operating under the term "risk factor."

Property taxes present their own challenge to generational wealth. When a home is passed from one generation to the next, taxes frequently reset to current rates, making the inherited property unaffordable for the family that was supposed to benefit from it. This directly undermines the wealth-building promise that homeownership is supposed to deliver.

Resources Most People Do Not Know About

One of the most valuable parts of our conversation was Ashley highlighting programs that are underutilized simply because people do not know they exist. Section 8 housing vouchers can be converted to homeownership vouchers, meaning the rental subsidy a family already receives can be applied to a mortgage payment. Down payment assistance programs exist where buyers do not need to come out of pocket at all. NAREB offers free homebuyer education through their 115+ local boards.

What NAREB Is Doing Now

NAREB has several major initiatives underway. Realtist Week runs April 12 to 18, 2026, with homebuyer education, credit literacy, and policy advocacy events across 115+ boards nationwide. The 8-City Affordable Homeownership Bus Tour launches April 25 and runs through May 2 in partnership with the African American Mayors Association, with stops in Baltimore, Philadelphia, Detroit, Gary, Kansas City, Memphis, Little Rock, and Tulsa. Sessions include Development for the People, Credit Power, and From Housing to Homeownership. Realtist Restore Day on June 27 mobilizes local boards for a national day of service supporting home restoration and family stabilization.

The Bottom Line

Housing is not a partisan issue. It is an American issue. The policies that created the homeownership gap were intentional. Closing it will require equal intentionality. Whether the path forward involves deregulation, modernized underwriting standards, restrictions on institutional investors, insurance reform, or all of the above, the conversation must move beyond talking points and into tangible action.

I am grateful to Ashley Thomas III for bringing this level of expertise and candor to Purple Political Breakdown. If any of this resonated with you, I encourage you to listen to the full conversation and share it with someone who is navigating the homebuying process or working in the housing policy space.

Listen to the full episode: https://podcasts.apple.com/us/podcast/what-does-democracy-in-housing-mean-in-2026-a/id1626987640?i=1000760037444

Resources:

• NAREB: nareb.com
• Affordable Homeownership Bus Tour: communityahbt.zite.so
• SHIBA Reports: nareb.com/reports

Sources:

• Purple Political Breakdown podcast interview with Ashley Thomas III, National President of NAREB
• NAREB organizational materials and initiative details provided by NAREB media team
• Ashley Thomas III credentials: 2026 Inman Power Player, CEO of LA Top Broker, Managing Broker of First Security Investment Co., Inc.
• Historical housing policy references discussed during interview (Homestead Act of 1862, FHA lending under the New Deal, Fair Housing Act of 1968)