A greater share of Black families own their homes today than did before the pandemic, but these small recent gains have yet to make a meaningful dent in the homeownership gap across the U.S.
Just under 45 percent of Black families own the home where they live, compared to 74 percent of white families, according to a Redfin analysis of U.S. Census Bureau data from the first quarter of 2022.
Both groups have seen small gains in homeownership — amounting to less than a percentage point for each group — since the start of the pandemic, as waves of buyers have looked to take advantage of once-historically low mortgage rates and get ahead of further price increases.
The economic disruptions of the pandemic fell disproportionately on Black households, Redfin Chief Economist Daryl Fairweather said in the report. This could have led to a worsening inequality in homeownership, but instead has resulted in Black Americans making small gains, she argued.
“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,” Fairweather said in the report.
Black Americans face disadvantages in the housing market that date back centuries. To this day, they make less money than white households, which can be a big barrier for accessing the credit needed to make such a large financial purchase.
But many Black families also have missed out on opportunities for wealth creation through homeownership over many decades.
The typical household in a formerly redlined neighborhood, for example, would have missed out on more than $200,000 in home equity gains over the last four decades, a previous Redfin analysis suggested. That’s money that could have been passed down to future generations, had the family been able to buy in at the time.
Broadening the view beyond the pandemic era, Black Americans have only made slight gains in homeownership rate since the housing market began to recover from the Great Recession. In 2012, 43 percent of Black families owned their home, compared to just under 74 percent of white families.
The gap is so wide, and so persistent that there is no major metro area in the country where it isn’t a glaring reality.
Even in Washington, D.C., where more than half of Black households own their home, the homeownership rate among white families is 21 points higher, according to Redfin’s analysis of the 2016-2020 American Community Survey. This represents the smallest gap of any major metro area in the country.
The largest gap was in Salt Lake City, Utah, where 77 percent of white households own their homes, compared to 23 percent of Black families.
Homeownership gaps of 40 percentage points or more were also recorded in Minneapolis; Pittsburgh; Cincinnati; Milwaukee; Grand Rapids, Michigan; and Rochester, New York.