In the first quarter of 2021, the homeownership rate among Black Americans was 45.1 percent compared to 73.8 percent among white Americans. That’s the latest number coming out of Redfin, which has devoted quite a bit of time and attention to examining the racial divide in homeownership.
But before you can even call the house yours, Black shoppers say they face measurable differences in experience and sacrifices.
A June Redfin survey of 1,500 homeowners found that Black Americans face greater financial and generational barriers to homeownership, including:
- Black homeowners were more likely than white homeowners to have made financial sacrifices—like taking on an extra job—to afford their first home.
- Black homeowners were about twice as likely as white homeowners to have been high earners when they bought their first home.
- Black homeowners were less likely than white homeowners to have parents and grandparents who are homeowners, which means they’re more likely to benefit from generational wealth when they’re purchasing a home.
“Homeownership is closely tied to the American ideal of freedom, and specifically financial freedom,” said Redfin Chief Economist Daryl Fairweather. “The fact that Black buyers report earning more money and making more financial sacrifices to enter the homeowner class is one example of how difficult it is for Black people in this country to achieve the American dream.”
Some 23 percent of white homeowners reported making no financial sacrifices to buy their first home, while 14 percent of Black homeowners did. Additionally, 30 percent of Black respondents took an extra job to afford their first home, whereas only 22 percent of white respondents made such a commitment.
“Black homebuyers may believe they face higher standards than their white counterparts for getting a mortgage and getting their offer accepted, so they don’t even try to buy a home until they’re earning a significant amount of money,” Fairweather said. “And some Black buyers assume they need to earn more than is necessary to buy a home because they don’t have parents or role models teaching them the finances of homeownership.”
Nationwide, 16 percent of Black Americans who apply for mortgages are rejected, compared with 7 percent of white Americans.
You can read more from the Redfin report by clicking here.