African American homebuyers are often steered toward non-White neighborhoods for that major purchase — and as a result, their homes often appreciate more slowly than their white counterparts, a new report on fair housing says.

Published by the Center for American Progress, “Racial Disparities in Home Appreciation,” analyzed mortgage data in six metropolitan areas across the country, including Chicago, and found African Americans buying homes in predominantly black areas — which, the report says, can contribute to persisting racial segregation.

And in segregated neighborhoods where African Americans bought homes, the report found, slow home appreciation took place when compared to white-majority neighborhoods, along with other threats to home ownership.

“Not only are African Americans receiving proportionally fewer home mortgage loans, obtaining more costly and riskier loans, and less likely to own their homes than white people,” the report said. “They are also constrained in their residential options and continue buying in predominantly African American neighborhoods where they have fewer chances than similarly situated white homebuyers to acquire assets that appreciate quickly.”

“African Americans historically have been kept away from the homeowner market mostly through housing policy,” Michela Zonta, author of the report, said. “Whenever you don’t have access to home ownership, you can’t build wealth and then transfer that wealth to the next generation.”

Zonta said all of this is closely tied with housing discrimination that persists today like “racial steering.” Real estate agents use this practice to deliberately steer African Americans away from “desirable” neighborhoods and into areas with a higher concentration of poverty.

In metro Chicago, African Americans accounted for only 8% of total loan origination compared to 61% from non-Hispanic white homebuyers between 2013 and 2017, according to the report.

When African Americans were able to secure a home loan in metro Chicago they tended to buy in census tracts with a majority African American population whereas white borrowers purchased homes where African Americans made up, on average, 6% of the census tract’s population — the least integrated pattern in the country.

The report also found the prices of homes in metro Chicago showed slow appreciation between 2006 and 2017. In 2017, prices on homes in neighborhoods where black borrowers predominantly purchased houses were 22% less than 2006 levels.

“It is really good to buy a home to accumulate equity and wealth through your home,” Zonta said. “But African American borrowers’ homes are not appreciating as well as white borrowers’ homes are.”

The report urges strengthening the Fair Housing Act — which became law in 1968 — to eliminate overt discrimination in the housing market and end racial segregation.

It recommends doing this through additional funding for the Fair Housing Initiatives Program and increased staffing in the U.S. Department of Housing and Urban Development and in the Office of Fair Housing and Equal Opportunity.

The report was also critical of Housing and Urban Development Secretary Ben Carson for proposing to scale down fair housing enforcement and his belief that federal efforts to desegregate neighborhoods are “failed socialist experiments.”

It asks local jurisdictions to be responsible for planning to achieve fair housing, which it had power over until Carson moved to restrict local regulatory burdens in 2018.

Manny Ramos is a corps member in Report for America, a not-for-profit journalism program that aims to bolster Sun-Times coverage of Chicago’s South and West sides.