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HUD Archives: News Releases

HUD No. 02-114
Brian Sullivan
(202) 708-0685 x7527

For Release
October 15, 2002

5.5 million additional minority homeowners will generate $256 billion for housing sector of U.S. economy

WASHINGTON - President Bush's goal of expanding minority homeownership by 5.5 million families will stimulate an additional $256 billion in benefits to the housing sector of the U.S. economy, according to a new report released today by Housing and Urban Development Secretary Mel Martinez. The HUD report, Economic Benefits of Increasing Minority Homeownership, was released today at the White House Conference on Increasing Minority Homeownership in Washington.

[Logo: Blueprint for the American Dream.]

In June, President Bush announced his goal to help increase minority homeownership by 5.5 million by the end of the decade in an effort to close the so-called "homeownership gap." This gap shows minority families continue to significantly lag behind the nation's homeownership rate. Despite increases in minority homeownership during the 1990s, less than half of African-American and Hispanic families own their own home while 74.3 percent of non-Hispanic whites are homeowners.

"President Bush's goal of opening the doors of the American Dream to more families will transform lives on so many levels," said Martinez. "When people own their own homes, they not only build their own futures, they transform entire communities in ways that have enormous social and economic benefits to all Americans."

Based on latest Census and other economic statistics, HUD's report indicates that homeownership not only serves as a source of stability for families and communities but also provides the foundation for many Americans' financial security. In addition to adding to personal wealth, owning a home also creates jobs in the construction trades and benefits businesses that sell home improvement and other housing-related goods and services.

Increasing Homeownership Spurs Job Growth

Perhaps the largest societal benefit of increasing homeownership is seen in the millions of jobs it creates for American workers. For example, building 1,000 single-family homes creates 2,448 full-time jobs. Approximately 40 percent of these jobs are onsite construction work; another 27 percent involve employment in transportation, trade, and other locally based services. Additional jobs are created to meet the increase in demand for household goods and services. This increase in jobs represents over $150 billion in new wages.

In addition, expenses for professional services provided when buying and financing a home, including those of real estate agents, mortgage originators and others are estimated to be $70 billion.

Increasing Homeownership Increases Consumer Spending

Studies have found that families who buy a new home spend more in the first year of occupancy that non-moving owners or renters. Personal spending for decorating, landscaping, dining out, etc., is higher than similarly situated households who have not moved. According to HUD's report, increasing minority homeownership by 5.5 million would directly increase spending on home improvements, appliances, and furnishings by almost $36 billion.

Building Wealth for Families and Economic Security for Neighborhoods

According to the Census Bureau, 21 percent of the nation's wealth is held in the form of home equity. Over time, purchasing a home has proven to be an effective wealth building strategy for millions of Americans. In addition, few sources of revenue contribute more to the health and economic security of state and local governments than the residential property tax. Coupled with transfer taxes on deeds and mortgages, these revenues contribute a tremendous amount to the fiscal health of state and local governments.

Read the new HUD report, Economic Benefits of Increasing Minority Homeownership or Blueprint for the American Dream.

HUD is the nation's housing agency committed to increasing homeownership, particularly among minorities, creating affordable housing opportunities for low-income Americans, supporting the homeless, elderly, people with disabilities and people living with AIDS. The Department also promotes economic and community development as well as enforces the nation's fair housing laws.



Content Archived: April 9, 2010

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