Millions Face Eviction or Foreclosure Amid Soaring Housing Costs, Racial Wealth Gaps


Each year Harvard University’s Joint Center for Housing Studies (JCHS) publishes a comprehensive report on the nation’s challenges and prospects in one of life’s most basic needs. This year, its State of the Nation’s Housing 2021assesses the rippling financial effects of the COVID-19 pandemic, while also warning that despite substantial federal government assistance, even more support is necessary to ensure that everyone shares in an improving economy.

According to the report, throughout the country, many rising housing costs are attributable to shrinking housing inventory that favors consumers wealthy enough to make cash offers on homes or those with savings substantial enough to cover both down payments and closing costs. These market forces only worsen housing options for low-to-moderate-income households – those hardest hit with the pandemic’s layoffs and/or reduced working hours.

“For those households with secure employment and good-quality housing, their homes provided a safe haven from the pandemic,” says Chris Herbert, Managing Director of the Center. “But for millions struggling to cover the rent or mortgage, their housing situations have become increasingly insecure, and these disparities are likely to persist even as the economy recovers, with many lower-income households slow to regain their financial footing.”

“Policymakers must be attuned to the needs of those who have fallen even further behind,” continued Herbert, “ensuring that they also benefit from the expanding economy.

Black America and other communities of color already suffered from pervasive discrimination, often the result of intentional structural barriers. Higher unemployment and under-employment, as well as low levels of wealth, are long-standing results. The lengthy pandemic worsened these circumstances by imposing dual crises – in health and personal finance.

Before the onset of the pandemic, JCHS found that the median wealth for homeowners in 2019 was $254,900—more than 40 times the $6,270 median for renters. Even excluding home equity, the median wealth of owners was $98,500, or more than 15 times that of renters.

That same year, 2019, wealth also differed widely by race and ethnicity: the median wealth of white households was roughly eight times that of Black households and over five times that of Latino households.

But by early 2021, the Black-White homeownership gap of 28.1 percent represented only an incremental improvement from that of 2019 when the gap was 30.8 percent. Much of that disparity is attributed to the racial differences in median incomes. While $71,000 was the median income of white households, the same data point for Black households was only $43,000, even lower than that of Latino households at $55,000.


In rental housing, housing affordability is so acute that even consumers with annual incomes as high as $49,999 paid more than 30 percent of their monies on housing in 2019. When the pandemic hit, one in five renters were in arrears – with Black households again suffering greater rates in late payments of 29 percent, more than double that of white households at 11 percent.

“Housing cost burdens have also moved up the income ladder,” says Alexander Hermann, a JCHS Senior Research Analyst. “Seventy percent of renter households earning between $25,000 and $34,999 and nearly 50 percent of renters earning between $35,000 and $49,999 were cost-burdened in 2019.”

The Joint Center for Housing Studies survey of renters found that an estimated 25% with COVID-related job losses had substantially depleted their savings. About the same number borrowed from families and friends, and 10 percent turned to predatory payday or personal loans.

For these and other households, the American Dream of homeownership is a distant one at best. Every available dollar is needed for food, utilities, and other essential life needs. Struggling to get out of debt looms largest for those facing a near-term eviction or foreclosure when current suspensions end. The federal moratorium on evictions will end in July.

Similarly, troubled homeowners who received loan forbearance and a ban on foreclosures have only 18 months to defer or reduce their monthly payments. In mortgage lending, forbearance is a temporary agreement between lenders and borrowers to delay a foreclosure. As of this March, 7.3 million had left this status but 2.3 million more mortgagees were still in forbearance.

America’s growing housing insecurity was also the focus of a June 9 hearing held by the House Financial Services Committee. Entitled, Ending Homelessness and Expanding Economic Opportunity in America, the forum offered expert testimony that supported many of the findings in the new JCHS report. Among the key concerns identified in a committee memo were:

  • The lack of affordable housing is the nation’s primary cause of homelessness and housing instability;


· Over 67 percent of people experiencing homelessness are Black, Indigenous, and Latinx, despite representing 12 percent, 1 percent, and 16 percent of the total U.S. population, respectively;


· Black men are more likely to experience lifetime homelessness due to lower incomes, and higher rates of incarceration and traumatic events; and


· Formerly incarcerated people are almost 10 times more likely to be homeless than the general public.

While the JCHS report included a recommendation to build more housing to address the nation’s shortage of housing inventory, California’s Rep. Maxine Waters, Chair of the House Financial Services Committee, proposed expanded housing vouchers to help low-to-moderate income families.