NAR: Racial Minority Groups Increased Homeownership Rates While Still Facing Challenges

Progress has been made in closing the racial homeowner disparity in the U.S. despite significant challenges still affecting would-be buyers. According to a new report out from the National Association of Realtors, homeownership rates for racial minorities increased in 2022, with Asian and Hispanic Americans achieving all-time highs.

The Black homeownership rate experienced a modest uptick to 44.1 percent, but remains substantially lower than Asian, Hispanic and White Americans. According to NAR, since 2012, the homeownership gap between Black and White Americans has widened from 27 percent to 28 percent.

Compared to a decade ago, U.S. homeownership significantly increased in 2022 with approximately 10.5 million more homeowners. The data, however, reveals significant disparities in housing affordability for existing homeowners across racial and ethnic groups. 

In Colorado, 41 percent of Black homeowners spend more than 30 percent of their income on housing, compared to 24 percent of White homeowners. In Hawaii and Iowa, the gap between the share of cost-burdened White and Black homeowners is more than 30 percentage points. 

In New York, 37 percent of Hispanic and Asian homeowners spend more than 30 percent of their income on housing, indicating a considerable affordability challenge, while 25 percent of White homeowners are cost burdened.

Black and Hispanic home buyers also encounter additional hurdles in securing mortgages, with applicants experiencing  higher denial rates for mortgage applications compared to their White and Asian counterparts, according to data from the Home Mortgage Disclosure Act.

“Minority homeownership gained ground this year, with Asian and Hispanic homeownership hitting record highs,”4 said Jessica Lautz, NAR deputy chief economist and vice president of research. “While the gains should be celebrated, the pathway into homeownership remains arduous for minority buyers.

“The impacts of housing affordability and limited inventory are more extreme for minority buyers, because more than half are first-time buyers who must rely on down payment sources beyond gained housing equity,” Lautz continued.

You can read the full report by clicking here.