Racial Disparities Persist on Path to Homeownership
While the overall U.S. homeownership rate has been rising, it’s not equal among all races.
The National Association of REALTORS® released a report Tuesday, “Snapshot of Race & Home Buying in America,” that breaks down ownership rates by race across the country. For non-Hispanic white Americans, the homeownership rate consistently stayed above 71% from 2016 to 2019, while for black Americans in that same period, it was a full 30 percentage points lower at 41%. Hispanic Americans held at about 45% during that three-year period, and the ownership rate among Asian Americans was more than 53%.
The report also offers a look at each race’s motivation to purchase, types of homes purchased, and other statistics that relate to race in the homebuying process. The finding show many differences and some hurdles to homeownership. For example, 62% of African Americans were rejected for a mortgage because of their debt-to-income ratio, and 50% of Hispanic Americans were rejected due to a low credit score.
The type of home that buyers were looking for also differed among races. For example, African Americans were most likely to purchase a multigenerational home at 22%, followed by Hispanics at 18%. Whites were the least likely to shop for a multigenerational house at 11%.
Median home prices varied considerably among races, too, with Asian/Pacific Islanders spending the most at $435,000 compared to $228,000 among African Americans, who tended to spend the least.
The report followed the release of NAR’s Fair Housing Action Plan on Jan. 8, in which NAR renewed its commitment to advance fair housing protections by educating members and the public on racial gaps in homeownership. NAR’s initiative, abbreviated “ACT,” will emphasize accountability, culture change, and training in urging real estate professionals to protect housing rights. NAR has vowed to integrate fair housing into all conferences and engagements and to form partnerships with fair housing advocates to pursue shared goals around accountability and training.
“NAR’s Code of Ethics and its adherence to fair housing are the cornerstones of our commitment as REALTORS®,” Bob Goldberg, NAR’s chief executive, said during the Jan. 8 meeting. “With this new plan, we will see more robust education focusing on core fair housing criteria, unconscious bias, and how the actions of REALTORS® impact communities. A partnership with government officials and fair housing advocates will allow us to further promote equality as we continue to work to diversify our industry.”