This post was originally published on this site
As home prices have soared this past year, home owners have witnessed their wealth skyrocket thanks to rising home equity.
But achieving homeownership — and being able to tap into that wealth-growing potential — remains much more difficult for people of color in this country, especially Black Americans.
A new report from the National Association of Realtors examined the homeownership rate among different racial and ethnic groups, and what factors are contributing to the disparities seen across the country.
According to the report, only 42% of Black Americans own homes, whereas over two-thirds of white Americans (69.8%) are homeowners. The Black homeownership rate is also lower than the rates for Asian-Americans (60.7%) and Hispanic Americans (48.1%).
“As indicative of the K-shaped economic recovery, greater numbers of potential first-time homebuyers — many of whom are minorities — are feeling discouraged by disproportionate job losses,” Lawrence Yun, chief economist at the National Association of Realtors, said in the report. “Essentially, they’re being priced out of owning a home because of rapidly rising home prices resulting from historically-low housing inventory.”
Nationwide, only 42% of Black households could afford to purchase the typical home, the trade organization reported, though affordability varied greatly from state to state. Less than a third of Black households could afford to purchase a home in states like California, Massachusetts, Nevada and Utah, among others, for instance.
Other factors are also creating additional hurdles for Black Americans on the path to homeownership beyond rising home prices. Black households were more than twice as likely to hold student debt as white households, at 43% versus 21%. Not only that, but the debt loads Black households have are larger: The median student loan debt for Black households was $40,000, around $10,000 more than white households.
And when it came to the mortgage application process, Black Americans were denied far more often than their white peers. The reported noted that 10% of Black mortgage applicants were denied a loan, as opposed to only 4% of white applicants.
And Black home buyers were more likely than buyers of other racial or ethnic backgrounds to say that they faced stricter requirements throughout a real-estate transaction because of their race.
The National Association of Realtors argued in the report that some of the policies proposed by the Biden administration could alleviate the disparities seen in the country’s housing market.
In particular, the trade group noted that Biden’s proposal of a first-time home buyer tax credit of up to $15,000 could address these issues, though they also warned that the administration would need to take additional action to ensure that such a policy does not worsen the housing inventory shortage seen across the country.
