Some racial minorities are gaining ground in homeownership, but affordability and systemic factors continue to perpetuate disparities in the housing market, a report from the National Association of Realtors found.
As a whole, homeownership rates increased for racial minorities in 2022 compared to a decade earlier. The report analyzed homeownership trends across the country while diving into differences between racial groups.
Homeownership in the country increased by more than 10 million households from 2012 to 2022, reaching a rate of 65.2 percent two years ago. That rate is down slightly from the preceding year, a result of challenges in affordability and inventory.
Asian and Hispanic Americans both had all-time highs in homeownership rates in 2022 at 63.3 and 51.1 percent, respectively. Each still trailed the homeownership rate of white Americans (72.3 percent).
But the homeownership gap between white and Black Americans has only grown in the analyzed period. The gap between the two groups widened from 27 percent to 28 percent, and the Black homeownership rate only rose slightly to 44.1 percent from 2012 to 2022.
“The pathway into homeownership remains arduous for minority buyers,” NAR deputy chief economist Jessica Lautz said in a statement.
One challenge for minority buyers is the pathway from renting to owning. First-time homebuyers can’t rely on housing equity to make their first down payment and instead often turn to savings. As rental costs have risen, however, disposable incomes and the ability to accumulate savings has gone down. This affects minority groups in particular, who are already systemically disadvantaged. Minority groups also rack up more student debt than white counterparts, another deterrent to saving.
Even if minority groups can find the fund for a down payment, they’re more likely to experience discrimination when applying for mortgages. Black and Hispanic mortgage applicants were denied loans 26 percent and 22 percent, respectively, far outpacing white applicants, according to the Home Mortgage Disclosure Act.
Overall, white Americans continue to dominate home purchases. White homebuyers made up 81 percent of all home purchases in the country, according to NAR’s 2023 data.
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