Black millennial Americans are increasingly becoming homeowners. Black adults between the ages of 26 and 39 have led recent increases in African American homeownership rates, according to a recent analysis of data from the National Association of REALTORS®.
Five percent of African Americans purchased homes during the first three months of 2020, which is up by 1% compared to a year ago.
“The fact that Black home purchases are much higher now compared to before the pandemic is quite a surprise,” says Lawrence Yun, NAR’s chief economist.
Yun expects the trend to continue in 2021. However, he notes that the uptick in home purchases does not reflect all African Americans’ economic conditions during the pandemic. Black Americans have faced significant job losses during the COVID-19 outbreak. Also, the wealth gap between whites and Blacks continues to widen.
The homeownership rate for African Americans—while rising—still remains well below whites, Asians, and Hispanics, according to Census Bureau data. As of the third quarter, the homeownership rate was 46.4% for Blacks compared to 67.4% for Whites.
“Disproportionately high rates of home loan application denials for Black and Hispanic applicants are a key factor contributing to the homeownership gap,” according to a recent report from Morgan Stanley looking at minority homeownership rates. Sixteen percent of Black households and 12% of Hispanics were refused a mortgage in 2019 compared to 8% of white households, according to the report.
But fixing such disparities could add 4.9 million more households, 784,000 jobs, and $400 billion in tax revenue by bringing homeownership levels in line racially, according to the analysis.
Source: “Black Millennials Contributed to Unexpected Home-Buying Surge,” Yahoo! News (Dec. 6, 2020) and “Morgan Stanley Says Housing Discrimination Has Taken a Huge Toll on the Economy,” CNBC (Nov. 13, 2020)
