Housing experts say that homeownership is growing out of reach for a rising number of minority households. Fewer than one in 10 homes for sale last year were affordable to African American households in several major cities, such as San Francisco, Denver, Boston, Los Angeles, and Seattle, a newly released study from Redfin reports.
The report calls out San Francisco, where less than 1% of homes for sale last year were affordable for African American households. Other housing markets are seeing similar issues: The number of homes affordable to African American families has fallen in every major metro area since 2012, and in some places by 30 percentage points or more, the Redfin report notes.
“As of 2018, there was not a single metro area where the [average] African American family could afford to buy at least half of the homes for sale,” the Redfin report states. “Overall just 25 percent of homes for sale in 2018 were affordable to the [average] African American household, down from 39 percent in 2012.”
A new report from Harvard University’s Joint Center for Housing Studies also called out the growing racial and ethnic disparities in homeownership. Last year, the black-white homeownership gap among households age 65 and over reached a 30-year high of 19.4%. The Hispanic-white gap stood at 18.4%, the JCHS report notes.
Since the beginning of the housing crash recovery in 2012, home prices have increased 70%, notes Redfin Chief Economist Daryl Fairweather. “African Americans, who were disproportionately affected by the housing crash in 2008, have found it much harder to get back into homeownership, especially as prices skyrocketed out of budget,” Fairweather says. “Since there continues to be a shortage of homes at affordable price points, the future doesn’t bode well for African Americans who aspire to be homeowners without a government effort for change.”
For the analysis, Redfin researchers factored in homes for sale in 2018 and 2012 and calculated the share of homes in each major metro area that would be affordable to an African American household earning the median income in that metro area and then the same for similar white households.
The most affordable metro areas for African American families tended to be in the South, while the least affordable areas tended to skew in California. Take a look at the chart to see the most affordable and least affordable metros for African American families.
Source: “A Typical African American Family Could Afford Just 25 Percent of Homes for Sale Last Year, Down From 39 Percent in 2012,” Redfin (Oct. 15, 2019)
