Black homeownership still falls far short of white homeownership.
Racial Homeownership Gap Persists
Just 44.7% of Black families nationwide own their home today, an increase of +.7% pre-pandemic. 74% of white families are homeowners, a marginal increase from 73.7% two years ago.
This comparative huge discrepancy in racial homeownership…29.3%…has barely budged from 30.4% during Q1 2012 when 43.1% of Black families were homeowners and 73.5% of white families owned their own home, according to data from the US Census.
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“The good news is that the Black homeownership rate didn’t decline during the pandemic, even though Black Americans were hit hardest by the coronavirus-related layoffs, (cases and deaths) and are recovering slower financially,” said Daryl Fairweather, Chief Economist with Redfin.
Fairweather continued. “But that’s only a glimmer of hope in a flawed system, where Black families are at an unfair financial disadvantage due to the legacy of racism and discrimination that has caused several generations to miss out on building wealth through homeownership.”
Metros with Largest & Smallest Racial Gaps in Homeownership Rates
According to an analysis by Redfin of five years of data from the US Census Bureau, here are the metros with 1M+ residents that have the highest percentages of Black families who own homes:
- 51% of Black families own a home in Washington DC and Birmingham AL
- 50% in Richmond VA
- 49% in New Orleans
- 49% in Philadelphia
- 49% in Atlanta
Washington DC also has the smallest racial gap in homeownership with Austin TX and Los Angeles following.
Black homeownership rates have increased the most in New Orleans (49% from 47% in 2012), Minneapolis (27% from 25% in 2012) and Boston (35% from 33%). Low Black homeownership rates in Baltimore, Denver, Hartford CT and Tampa FL have remained unchanged for a decade.
On the other side of the coin,
- 23% of Black families own their own home in Salt Lake City
- 25% in Milwaukee (25%),
- 27% Minneapolis
- 31% in Las Vegas & San Diego
Salt Lake, Minneapolis and Milwaukee also have the largest racial homeownership gaps.
Causes of Racial Divide in Homeownership Rates
Redlining and discriminatory housing policies and covenants are central to the racial gap in homeownership rates.
Redfin also points to these contributing factors:
- Persistent wage gap nationwide – Black men earn 87 cents to the dollar white men earn; Black women earn just 63 cents to the dollar white women earn.
- Black college graduates owe nearly double the amount of student debt compared to the amount of student debt owed by white college graduates.
- Due to predatory lending during the Great Recession, nearly 8% of Black households with mortgages were foreclosed upon between 2007 and 2009 compared to 4.5% of white households with mortgages.
The Good News?
In Q4 2021, the total value of real estate wealth via Black homeownership increased +31.1% y/y to hit a record $1.3T. in Q4 2021. Also, Black homeowners increased their total home equity by +45% to $1.5T, according to the Federal Reserve.
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Thanks to Redfin