National Study: In nearly every state, people of color less likely to own homes than whites

(Source & Credit: Harvard University) – The American Community Survey conducted by Harvard University’s Joint Center for housing Studies finds that in every state throughout the nation, Black, Hispanic, and Native American households have lower homeownership rates than white households. Likewise, Asian households were less likely to be homeowners in all states but Hawaii.

According to the tabulations from the survey: 

There’s almost a 25 percent racial homeownership gap. Fully 71.7 percent of white households owned their homes in the United States in 2015-2019 compared to 47.0 percent of households of color, representing a 24.6 percentage point racial homeownership gap.

Gaps most prevalent in Northeast and Midwest. While homeownership rate gaps are pervasive, they tend to be largest in states in the Northeast and Midwest.

North Dakota among states with largest gaps. The homeownership rate gap between white households and households of color exceeded 30 percentage points in 13 states. States with widest gaps are: Connecticut (35.8 percentage points), South Dakota (35.7 percentage points points), North Dakota (35.7 percentage points), and Wisconsin (35.4 percentage points). 

Native American ownership gap.
 Nationally, fully 56.7 percent of Native American households owned their homes, 15.0 percentage points lower than white households. Native American-white homeownership rate gaps exceeded 30 percentage points in five states. 

Blacks have the lowest rate of homeownership.
However, the racial homeownership gap is most striking for Black households. At just 41.7 percent, Black households have the lowest homeownership rate nationally—30.0 percentage points lower than white households. Indeed, Black-white homeownership gaps exceeded 30 percentage points in 37 states, including 10 states where they exceeded 40 percentage points.

Less than a quarter a Black households are homeowners in four states – including North Dakota.
 Homeownership rates among Black households also varied significantly across the country. Under a quarter of Black households were homeowners in four states with small Black populations: North Dakota (9.0 percent), South Dakota (22.2 percent), Hawaii (24.2 percent), and Minnesota (24.2 percent). 

No Single Cause for Gaps… 

The pervasiveness and severity of racial homeownership gaps indicates that there is no single cause of the gap.

  • 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.
     
  • These realities have collectively prevented households of color from accumulating the kind of wealth that’s increasingly necessary to afford homeownership in today’s market

And No Single Solution, Either

Just as there’s no single cause, there’s no one solution to solving these challenges.

  • Special purpose credit programs and other lending efforts that offer downpayment assistance, interest rate reductions, or more flexible lending requirements for homebuyers of color have the potential to narrow racial homeownership gaps directly.
     
  • Homeowner Assistance FundThese successes can be aided and sustained through homeownership counseling and the kinds of emergency assistance offered to homeowners during the pandemic, such as the widespread availability of loan forbearance or the Homeowner Assistance Fund.
     
  • Moreover, supply-side solutions aimed at expanding the amount of housing available will help alleviate supply shortages in constrained markets and ultimately keep home price growth in check.

While racial homeownership gaps vary somewhat state-to-state, their extent and persistence across the country demonstrate the need for coordinated policies and programs—at the state and national level—to address these gaps.

Click here to learn more about the study, including its methodology.

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