Why the Black Homeownership Rate Has Fallen Over the Past Decade
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Over the past decade, the number of Black homeowners has fallen—and the percentage of Black homebuyers has barely budged.
Black homebuyers made up only 9.1% of all buyers from October 2020 through September 2021, according to a recent Realtor.com® analysis of sales data. That’s just barely higher than it was a decade ago when these buyers represented 8.9% of all those who successfully purchased a home.
Even with more Black millennial and female buyers getting into the market, just 43.1% of Black households were homeowners in the fourth quarter of 2021—down from 45.1% in the last quarter of 2011. In comparison, 74.4% of white households owned property in the last quarter of 2021, according to U.S. Census Bureau data. (Households include all of the people living under one roof, such as roommates, couples, and extended families.)
“For many Black families, the housing market has not offered opportunities on par with the strong economy and job market. Mortgage rates have dropped, but even with that, Black buyers have not reaped the benefits,” says George Ratiu, manager of economic research at Realtor.com. “Homeownership can provide stability and help launch families into the middle class.”
Big gains were made in the 2000s during the run-up to the financial crisis, with nearly half of Black households owning their abodes. But the foreclosure crisis hit communities of color the hardest as these buyers were targeted with subprime and other bad loans. Many have not been willing—or able—to get back into homeownership.
Ending housing discrimination and helping more Black Americans build wealth through homeownership has been one of the priorities of President Joe Biden‘s administration. However, record-low numbers of homes for sale leading to new all-time high prices, bidding wars, and all-cash offers have been a struggle for most buyers, particularly those of color.
Many Black Americans earn less than white Americans due, in part, to decades of discrimination and systemic racism. Black households had real median incomes of just $45,870 in 2020—almost $30,000 less than white households earning $74,912, according to census data. In this cutthroat housing market, it’s been tough for buyers without lots of cash in the bank to become homeowners.
Roughly 19% of Black homebuyers were unsuccessful last year in their attempts to buy a home, according to a recent Realtor.com survey of more than 2,500 Americans.
“Rising inflation, rents, mortgage rates, and home prices have really combined to make it more challenging to buy a home,” says Ratiu. “This has locked many buyers out of homeownership. It’s preventing them from building a stable financial foundation.”
Just over half of all Black buyers were searching for homes priced at $350,000 or less last year. And a quarter were looking for homes priced up to $750,000, while about 15% were searching for properties in the $750,000 to $1 million bracket.
The post Why the Black Homeownership Rate Has Fallen Over the Past Decade appeared first on Real Estate News & Insights | realtor.com®.
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