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Report finds more black Detroit residents have taken out mortgages since 2018

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Report finds more black Detroit residents have taken out mortgages since 2018

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More than a decade after bankruptcy, Detroit needs middle class growth to thrive.

That’s the case in a new report released Wednesday by the think tank Detroit Future City, which examines changes in the city’s population, income, education and housing. Detroit has seen economic gains and losses on its path to becoming a middle-class city, researchers say. Since 2012, Detroit has seen an increase in mortgage originations — loans that have gone primarily to Black homebuyers since 2018. But nearly 100,000 Black residents have left the city in the past decade.

“A strong middle class will drive economic growth, promote community stability and pave the way for sustainable progress in Detroit and the entire region,” said Anika Goss, CEO of Detroit Future City, in a press release.

More: Mayor Duggan and council members unveil new plan for affordable housing financing

The new, comprehensive report builds on previous DFC research into the income levels, employment, housing and other economic factors of Detroit residents.

These are three conclusions from the report:

More black home buyers got mortgages

Mortgage originations in the city grew from 220 loans in 2012 to 3,211 in 2022. As of 2018, black homebuyers were the biggest drivers of that increase. In 2022, for example, there were 1,477 home purchase loans going to black buyers, compared to 652 loans going to white buyers.

According to Edward Lynch, director of research at Detroit Future City’s Center for Equity, Engagement and Research and author of the report, white buyers look to specific neighborhoods for homes, such as downtown, Midtown, the West Village and parts of the University District. Black buyers, on the other hand, find neighborhoods outside of these select areas attractive for home purchases.

However, the majority of loans to black borrowers were less than $150,000.

Fewer rental properties available for less than $1,000 per month

Detroit is still a city for both renters and homeowners. But rents have been rising since 2014. That year, the gross rent in the city was $893. In 2022, that will rise to $990. There are also fewer rental properties available for less than $1,000 a month.

In 2019, $1,000 units made up two-thirds of the city’s rental units, but they now account for more than half of Detroit’s rental housing, the report found. Sixty percent of renters spend more than 30% of their income on housing — more than what’s considered affordable under federal standards. Income levels determine whether housing is affordable for Detroiters.

“Once people get to a certain level of income, they are much more able to not spend a large portion of their income on rent,” said Ashley Williams Clark, vice president of Detroit Future City and director of the center for equity, engagement and research.

Detroit residents earn less than suburban residents

Incomes among Detroiters are lower compared to those in metro Detroit. In 2022, the median household income in Detroit was $52,254. In metro Detroit, it was $105,455.

The median household income of black Detroiters is about $25,000 less than that of black metro Detroiters. White Detroiters earn about $31,300 less than white metro Detroiters. Latino and Hispanic Detroiters earn about $40,500 less than suburban residents.

“Household income is an important component of people’s ability to enter the middle class and in creating middle-class neighborhoods,” the report said. “Having sufficient income to enter the middle class provides people with a level of financial stability and the ability to build wealth through purchasing a home or saving for retirement.” To read the full report, visit www.detroitfuturecity.com.

Contact Nushrat Rahman: [email protected]. Follow her on X: @NushratR.

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