Mortgage News March 16, 2023
The US homeownership rate has been on the rise for the last decade, reaching 65.5% in 2021, up from 64.7% in 2011. However, this growth has not been consistent across all racial groups. The National Association of Realtors (NAR) has released a report, the 2023 Snapshot of Race and Home Buying in America, which highlights the significant challenges that people of color face in the home buying process.
The report analyzed NAR’s latest Profile of Home Buyers and Sellers data to explore the characteristics of who purchases homes, why they purchase, what they purchase, and the financial background of buyers by race. The findings reveal that the Black American homeownership rate has increased less than half a percentage point, standing at 44% in 2021, compared to 43.6% in 2011. This rate is well behind Hispanic Americans (50.6%), Asian Americans (62.8%), and White Americans (72.7%). Furthermore, the homeownership gap between Black Americans and any other racial group, especially White households, has grown to represent the largest homeownership gap in ten years.
In addition to these gaps, the report also found that Black homeowners spend more of their income on owning homes than all other racial groups. This leaves 30% of Black homeowners cost-burdened, which means they spend more than 30% of their income on housing. This percentage is followed by Hispanic Americans (28%), Asian Americans (26%), and White Americans (21%). The challenges faced by Black Americans extend to renters, as more than half (54%) of Black renter households spend more than 30% of their income on rent, with 30% being severely cost-burdened, representing nearly 2.5 million households.
The report also highlights that home buyers from different racial groups have different experiences. For instance, half of the Hispanic American home buyers said they experienced steering toward or away from specific neighborhoods, followed by 29% of White, 12% of Black, and less than 1% of Asian American home buyers. This data indicates that the housing market still has significant racial disparities and that more needs to be done to ensure that all people, regardless of race, have access to affordable and quality housing.
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