How Race Complicates Achieving the American Dream of Purchasing a Home

The “American Dream” has long been associated with owning a home, but there are several factors, including race, that can make achieving this dream complicated. Despite federal legislation designed to promote fair and equal access to housing, people of color still face barriers that prevent them from purchasing homes at the same rate as white Americans. In this post, we’ll explore some of the ways that race complicates the achievement of the American Dream of purchasing a home.

The Legacy of Redlining

One major barrier to homeownership for people of color is the legacy of redlining. Redlining refers to the practice of systematically denying credit or other services based on race or the racial composition of a neighborhood. Beginning in the 1930s, the Federal Housing Administration (FHA) created maps of American cities that designated certain areas as “hazardous” for lending purposes. These areas were typically neighborhoods with high proportions of African American or other minority residents, and banks were instructed not to lend money for homes or businesses within these “redlined” areas. This practice contributed to persistent patterns of segregation and disinvestment in communities of color, making it much harder for people in these areas to obtain mortgages or invest in their homes.

Discrimination in the Mortgage Industry

Even today, many people of color experience discrimination when attempting to secure a mortgage. People of color are more likely to be denied a mortgage or offered a higher interest rate than their white counterparts, even when they have similar credit scores and financial profiles. This discrimination can make it much more difficult for people of color to secure affordable housing and accumulate wealth through homeownership.

Housing Affordability Challenges

In addition to discrimination, people of color also face significant housing affordability challenges that make it difficult to purchase a home. Many low- and middle-income people of color are unable to save enough money for a down payment or afford the high costs of homeownership. These challenges are exacerbated in cities and regions with high housing costs, where even families with two full-time incomes may struggle to afford a home.


Achieving the American Dream of homeownership can be complicated by race in several ways. The legacy of redlining has created systemic barriers to homeownership for people of color, while discrimination in the mortgage industry makes it more difficult to secure financing for a home. Additionally, housing affordability challenges make it difficult for low- and middle-income people of color to achieve homeownership. Recognizing and addressing these challenges is crucial if we are to create more equitable and just housing policies and increase access to the American Dream of homeownership for all Americans.

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