The racial inequities of homeownership in America are widening. That’s the headline coming out of the National Association of Realtors, which found the record-high prices and record-low inventory of the past two years has particularly hit Black communities hard.
According to a new report, The Double Trouble of the Housing Market, NAR analysts found that more than 400,000 fewer affordable homes are available for sale for households earning $75,000-100,000 compared to the start of the pandemic. That means for that same income group, there’s one affordable listing available for every 65 households, a significant drop in availability from one affordable listing for every 24 households in 2019.
Looking at the demographics of homeowners, NAR finds a significant racial homeownership gap not only still exists, but worsened during the pandemic.
Since 2017, the annual homeownership rate for White Americans has remained above 70 percent, while the homeownership rate for Black Americans has sat slightly above 40 percent. Taking into account the household earnings needed to buy a so-called “affordable” home mentioned above, only 20 percent of Black households have incomes greater than $100,000. Some 51 percent of all homes currently listed for sale are affordable to households with at least $100,000 income—therefore excluding a large number of Black Americans from entertaining the idea of buying a home.
For comparison sake, 35 percent of White households have incomes greater than $100,000.
“In general, an increase in salary makes housing more affordable to a buyer. But due to the reductions in inventory over the last few years, today’s buyers in large tech markets can actually afford a smaller number of homes than they could two years ago, despite an uptick in wages,” said Realtor.com Chief Economist Danielle Hale. “The low inventory challenge is particularly acute for some racial and ethnic groups who have faced greater hurdles to homeownership stemming from, among other things, lower incomes as a group.” \
NAR and Realtor.com identified the top 10 most affordable housing markets for Black households, including:
- Akron, Ohio
- Baltimore, Md.
- Birmingham, Ala.
- Dayton, Ohio
- Detroit, Mich.
- McAllen, Texas
- Memphis, Tenn.
- St. Louis, Mo.
- Toledo, Ohio
- Youngstown, Ohio
To read the full Double Trouble of the Housing Market report, click here.