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Racial homeownership gaps still persist

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Two recent reports analyzed the persistent gaps in homeownership between white households and people of color.

In an analysis by the Joint Center for Housing Studies at Harvard University (JCHS), a researcher concluded coordinated policies and programs, at both state and national levels, are needed to address racial homeownership gaps.

In another study, by Zillow, data indicated homes owned by Black families appreciated the fastest during the pandemic, but this cohort only made slight gains in homeownership.

JCHS used tabulations of the American Community Survey. Those figures showed 71.7% of white households owned their homes in the United States in 2015-2019, but only 47% of households of color were homeowners – a gap of nearly 25 percentage points.

Data show the gap in homeownership rates exceeded 30 percentage points in 13 states, with Connecticut, South Dakota, North Dakota and Wisconsin topping the list.

Gaps persisted elsewhere, but were below 20 percentage points in 12 states, with New Mexico, Wyoming, Washington, DC and California all notching gaps of 16.5 percentage points or lower.

“The racial homeownership gap is most striking for Black households,” reported Alexander Hermann, a research associate at the Center. It was reported to be just 41.7%, with 37 states having gaps of at least 30 percentage points, including 10 states where gaps exceeded 40 percentage points.

JCHS research shows Asian households had the highest homeownership rates among households of color, at 59.4%. They were followed by Native American households, at 56.7% and Hispanics, at 46.8%.

“The pervasiveness and severity of racial homeownership gaps indicates that there is no single cause of the gap,” concluded Hermann. “Households of color overall and Black homebuyers in particular have been precluded from accessing and sustaining homeownership through a history of redlining, segregation, and other forms of discrimination within and outside the U.S. housing market.”

Hermann noted there’s no one solution to solve the vexing challenges, but listed several ways to help narrow the racial gaps, including:

  • Special purpose credit programs and other lending efforts that offer downpayment assistance.
  • Interest rate reductions.
  • More flexible lending requirements for homebuyers of color.
  • Homeownership counseling.
  • Wider availability of loan forbearance of the Homeowner Assistance Fund.
  • Supply-side solutions aimed at growing housing inventories, particularly in acutely constrained markets.

In the Zillow study, analysts reported the gap between the value of the typical Black-owned home and the typical U.S. home is the smallest it has been in the past two decades. It lags by 14.8%.

Since the start of the pandemic, the typical Black homeowner gained nearly $84,000 in equity. From February 2020 to January 2023, their home values increased 42.5% compared to 38.2% for U.S. home values overall, and 37.8% for white-owned home values. Their rate of appreciation outpaced all other races since 2014, according to data from Zillow and the Home Mortgage Disclosure Act.

“These gains are extremely important in terms of increasing wealth among the Black community, as homeowners of color are more likely to have the bulk of their household wealth tied up in their homes,” stated Nicole Bachaud, senior economist at Zillow.

The company analyzed pandemic-era changes in Black American’s Housing Wealth, comparing changes in values and homeownership rates:

Pandemic-era Changes in Black Americans’ Housing Wealth (selected areas) 

*Ranked by largest reduction in home value gap between Black-owned homes and the overall typical home in the region

Metropolitan area*Pandemic-era
change in Black-
owned home
value vs. all
homes’ value
Typical Black-owned home valueTypical home
value overall
Black home- ownership rate change, 2019–2021
(percentage points)
Black home- ownership rate gap, relative to white households, as of 2021 (percentage points)
United States-2.5$280,925$329,5422.0 %-29.3
Chicago, IL-6.9$197,274$289,4692.5 %-33.4
New York, NY-2.7$515,993$574,0742.1 %-32.9
Atlanta, GA-2.7$312,955$357,3124.6 %-25.3
Houston, TX-1.5$252,508$295,1082.2 %-31.8
Boston, MA-0.8$506,924$607,1151.4 %-33.4
San Antonio, TX-0.8$285,415$287,2063.8 %-23.8
Austin, TX-0.1$390,391$476,5810.9 %-24
San Jose, CA0$1,220,780$1,358,777-1.8 %-38.5
Salt Lake City, UT0$513,061$523,7312.2 %-47.3
Denver, CO+0.1$504,356$568,272-4.1 %-29.8
Portland, OR+0.5$501,708$523,2721.4 %-25.8
Los Angeles–Long Beach–Anaheim, CA+0.6$681,532$841,462-2.5 %-25.1
Minneapolis–St. Paul, MN-0.8$303,390$349,4726.6 %-45
Seattle, WA+1.5$573,551$688,3124.0 %-33
San Diego, CA+1.7$652,147$816,218-0.3 %-34
San Francisco, CA+3.6$826,439$1,087,239-0.9 %-28.8

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