Real estate agents with a large minority clientele are finding a dwindling number of homes in major markets that are in reach of these buyers. In fact, a study by Redfin found in 2016 that just 18 percent of homes for sale in the 30 largest U.S. metros were affordable for middle-class Hispanic families and 14 percent were affordable for African-American families.
According to a report by Forbes, these rates have slid 11 points over the last four years and compared to rates in which 30 percent of homes are affordable for those earning the median income for white households, down 12 percentage points since 2012.
Redfin chief economist Nela Richardson told Forbes American cities are at risk of losing both the economic and racial diversity that has been their hallmark.
“Middle-class homebuyers are being priced out of America’s largest cities at an alarming rate, as the home affordability gap gets wider. Given the significantly lower rates of homeownership among African-American and Hispanic families, the reduction in affordable listings has even more dire consequences for income inequality when broken out by race.”
During this period, affordability has declined for the entire middle class as home prices have risen by 26 percent and household incomes grew by less than 2 percent nationwide. According to the report, four years ago 44 percent of homes for sale were affordable on a middle-class income. By 2016, that figure had dropped to 32 percent.
The survey also found that middle-class African-American and Hispanic families were being priced out of homes in several large Western markets, including Denver, Los Angeles, Portland, San Francisco, San Diego and Phoenix, where fewer than 5 percent of homes on the market were affordable on the median household incomes for African Americans and Latinos.
The only major metro area to see an increase in affordability for African-Americans and Hispanics was St. Louis. It was up 5.4 percent for Hispanics and 4.3 percent for African-Americans.
However, Richardson pointed out that she does see some potential solutions, including the potential for regulation on local level to offer an option to boost homeownership.
“For one, federal and state governments can do much more to be influential in local housing policy.”
According to Lawrence Yun, chief economist at the National Association of Realtors, homeownership continues to take a hit.
“Housing affordability is worsening. Home values are rising twice as fast as wage growth.”
For real estate agents, the current trend may amount to a wave that has to wash itself out.
