The Percentage Of Black People Who Own A Home Is Currently Smaller Than It Was A Decade Ago

Despite the fact that property prices have surged as a result of the epidemic, the number of people who own homes continues to rise. According to a new survey from the National Association of Realtors, however, the rate of house purchases has not grown at the same rate for all Americans.

According to the National Association of Realtors, more Americans own a house currently than in any year before the Great Recession, with the homeownership rate expected to reach 65.5 percent in 2020. This is up 1.3 percent over the previous year, the highest yearly growth on record.

However, Black homeownership remains lower than it was a decade ago, at 43.4 percent. And it lags below the White homeownership rate of 72.1 percent by over 30 percentage points. Meanwhile, the Hispanic homeownership rate has risen to an all-time high, surpassing 50% for the first time, while the Asian homeownership rate has risen to 61.7 percent.

“Housing affordability and low inventory has made it even more challenging for all buyers to enter into homeownership, but even more so for Black Americans,” said Jessica Lautz.

Vice President of Demographics and Behavioral Insights of the National Association of Realtors.

According to Lautz, the inequalities illustrate the difficulties that minority house purchasers confront.

“Today, homeownership is the principal source of wealth creation for most American households,” said Marcia L. Fudge, Secretary of the Department of Housing and Urban Development, in a statement. “Unfortunately, NAR’s report confirms that Black Americans are being locked out of homeownership opportunities at an even higher rate than a decade ago.”

Secretary Fudge added: “It is critical that we bridge the racial homeownership gap with intentional solutions that recognize both the persistent history of discrimination and inequity, and the current crisis of housing affordability.”

Entry-level buyers’ ability to afford a home has been significantly more challenging during the epidemic, according to NAR.

Since 2019, property prices have increased by 30%, or around $80,000 on average for a typical home. Meanwhile, available housing inventory has dropped to under one million units. According to the survey, approximately half of those properties are only affordable to families earning at least $100,000 each year.

While almost half of all Asian households and 35% of White households make more than $100,000 per year, just 25% of Hispanic households and 20% of Black households do.

According to a NAR research based on income levels and property availability, Maryland, West Virginia, Kansas, Ohio, and Indiana are the most inexpensive states for Black households to buy a home. Utah, Oregon, California, Nevada, and Rhode Island are the least inexpensive states for Black families.

In addition to paying a lesser price for a property, Black and Hispanic home purchasers face significant challenges on the path to homeownership.

According to the National Association of Realtors, Black and Hispanic Americans are more likely than White and Asian Americans to be denied a mortgage, and Black Americans experience more prejudice in real estate transactions.

Black families are also the most likely of any group of homebuyers to have student loan debt, which might make it difficult for them to save for a down payment. Black families have school debt at 41 percent, about twice that of Asian households (18%) and nearly twice that of White households (22%), while Hispanic households have student debt at 26 percent.

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According to the research, Black Americans have more student loan debt than Hispanics, Whites, and Asians, with a median debt total of $45,000, compared to $35,500 for Hispanics, $30,000 for Whites, and $24,400 for Asians.

Because half of the Black renter households are cost-burdened, spending more than 30% of their income on rent, saving for a home is a significant barrier for them. Furthermore, 28% are “severely cost-burdened,” meaning they spend half or more of their income on rent.

“Black households not only spend a bigger portion of their income on rent, but they are also more likely to hold student debt and have higher balances,” Lautz said. “This makes it difficult for Black households to save for a down payment and as a result, they often use their 401(k) or retirement savings to enter homeownership.”

According to the National Association of Realtors, Black and Hispanic Americans were at least twice as likely as White Americans to use their 401(k) or pension savings as a down payment source for a house purchase.

The Black Homeownership Collaborative was formed by a coalition of housing organizations, including NAR, with the goal of increasing Black homeownership by 3 million households by 2030. Improvements in homeownership counseling and down payment aid, credit and mortgage products for underserved and excluded communities, and raising the number of affordable houses are among the recommendations.

According to the organization, raising the number of existing Black homeowners by 72 percent, or nearly 5 million, would bring the rate of Black homeownership up to that of White Americans.

Separately, HUD formed an interagency task group on appraisal bias and introduced a homebuyer assistance program, which gives states money to help people stay in their homes.

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