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The share of Black Americans that own a home barely budged in the 10 years between 2011 and 2021, according to a report from the 1.5 million-member National Association of Realtors.
NAR’s “2023 Snapshot of Race and Home Buying in America” found that the U.S. homeownership rate overall rose from 64.7 percent to 65.5 percent in that decade — adding 9.2 million more homeowners. But the Black homeownership rate only rose 0.4 percentage points during that time, to 44 percent, while the white homeownership rate rose 2.9 percentage points, to 72.7 percent. That’s a nearly 29 percentage point gap.
That’s bigger than the 26 percentage-point Black-white homeownership gap that existed in 2011 and the biggest gap in the last decade, according to the report. Inman asked when the gap was last bigger than 29 percentage points and NAR noted that the U.S. Census Bureau’s American Community Survey, the data’s source, only provides estimates since 2005.
“So, it doesn’t provide long history,” said Nadia Evangelou, NAR’s senior economist and director of real estate research, in an emailed statement. “Thus, since then (2005), in 2021 we had the largest gap if we exclude 2020 (due to quality issues of the ACS data).”
Jessica Lautz
In a statement, Jessica Lautz, NAR deputy chief economist and vice president of research, said, “Unfortunately, the incredible affordability challenges of the last year have hit minority homebuyers more than White buyers.
“Black buyers are more likely to be first-time buyers, who are more sensitive to changes in mortgage interest rates, while White buyers are more likely to have housing equity to rely on as they make a housing trade.”
Meanwhile, Asian-American homeownership reached an all-time high in 2021, rising nearly 5 percentage points in the previous decade to 62.8 percent, and Hispanic homeownership increased just over 4 percentage points, to 50.6 percent.
The net worth of a typical white family was nearly 8 times greater than that of a Black family in 2019 ($188,200 vs. $24,100), according to the report.
Black renters are more cost-burdened than any other racial group with 54 percent spending more than 30 percent of their income on rent, the report said. Almost a third, about 30 percent, spend more than half of their income on rent, compared to 22 percent of white renters. NAR estimated that only 9 percent of Black renters can afford to buy a typical median-priced home compared to 17 percent of white renters.
Black homeowners are also the most cost-burdened with 30 percent spending more than 30 percent of their income to own their homes, according to the report. That figure is 28 percent for Hispanic homeowners, 26 percent for Asian-American homeowners, and 21 percent for white homeowners.
“Even among successful homebuyers, Black Americans have lower household incomes, which narrows the available pool of inventory they may be able to afford and makes their journey into homeownership even more difficult in this limited housing inventory environment,” Lautz said.
In an announcement about the report, NAR stressed increasing the nation’s inventory as one way to address the issue.
“NAR advocates that all levels of government: support the construction of housing that is affordable to the typical consumer; preserve, expand and create tax incentives to renovate distressed properties and convert unused commercial space to residential units; and encourage and incentivize zoning reform,” the trade group said.
“Expanding new-home construction by an additional 550,000 units a year for 10 years would create 2.8 million new jobs and generate more than $400 billion in economic activity.”
NAR also stressed its role as co-chair of the steering committee for the Black Homeownership Collaborative, a coalition of more than 100 organizations that have a goal of creating 3 million net new Black homeowners by 2030, known as 3by30.
According to NAR, the U.S. added 202,880 Black homeowners in 2021. That means that the U.S. would have to add 310,791 homeowners every year starting in 2022 through 2030 to reach that goal — a 53 percent increase from the number added in 2021. The Black Homeownership Collaborative has a seven-point plan to get there, including homeownership counseling, down payment assistance, housing production, credit and lending, civil and consumer rights, homeownership sustainability, and marketing and outreach.
Citing Home Mortgage Disclosure Act (HMDA) data, NAR’s report said Black homebuyers are most likely to be denied a mortgage: 20 percent of Black loan applicants were rejected compared to 15 percent of Hispanic loan applicants, 11 percent of white applicants and 10 percent of Asian-American applicants.
Using data from NAR’s latest Profile of Home Buyers and Sellers report, the trade group found that, among all racial groups, Black Americans were most likely to use retirement funds for a down payment (16 percent) while Asian Americans were most likely to receive gifts (22 percent) or loans (7 percent) from a relative or friend.
The amount of student loan debt homebuyers carried also varied considerably. Nearly half of Hispanic Americans (46 percent) had student loan debt, followed by 33 percent of Black Americans, 17 percent of white Americans and 13 percent of Asian Americans, the report said.
NAR also asked homebuyers if they had experienced or witnessed discrimination during their real estate transaction. Half of Hispanic homebuyers reported that they were steered toward or away from specific neighborhoods, compared to 29 percent of white homebuyers, 12 percent of Black homebuyers, and less than 1 percent of Asian-American homebuyers.
Nearly half — 46 percent — of Hispanic homebuyers said a homeowner or agent refused to show them a property, compared to 24 percent of Black homebuyers, 15 percent of white homebuyers, and less than 1 percent of Asian-American homebuyers.
Echoing news reports, 39 percent of Black homebuyers said they’d experienced discrimination through home appraisal, compared to 17 percent of Asian-American homebuyers, 9 percent of white homebuyers, and less than 1 percent of Hispanic homebuyers.
NAR’s report also found that housing segregation is alive and well — at least when it comes to where white Americans live. Three-quarters — 75 percent — of white homebuyers reported that the majority of their neighborhood was the same race as them. At the same time, 19 percent of both Black and Asian-American homebuyers and 17 percent of Hispanic/Latino homebuyers said the majority of their neighborhood was the same race as them.
Editor’s note: This story has been updated with an additional comment from NAR.
