US Homeownership Rate on the Rise But Black Americans Left Behind

The US homeownership rate surged 1.3% to 65.5% in 2020—the highest annual rise ever—as 2.6 million more households became homeowners compared to 2019, according to the National Association of Realtors.

More Americans are likely to own a home now than during any year following the Great Recession, when there was a 65.4% homeownership rate in 2010.

However, the homeownership rate for Black Americans (43.4%) is lower than in 2010 (44.2%) and nearly 30 percentage points less than White Americans (72.1%). 

The homeownership rates for Asian Americans and Hispanic Americans are 61.7% and 51.1%, respectively, both all-time highs.

Accept or Reject

NAR also reported that black and Hispanic applicants (7% each) were more likely to be rejected for mortgage loans than White (4%) and Asian (3%) applicants.

Black households—at 41%—are the most likely to have student loan debt and also have the largest median student loan balance of $45,000.

Low Inventory of Houses a Key Factor

Jessica Lautz, NAR vice president of demographics and behavioral insights, noted that it is important to understand the unique challenges that minority home buyers face. 

“Housing affordability and low inventory has made it even more challenging for all buyers to enter into homeownership, but even more so for Black Americans,” she said in prepared remarks. 

Housing affordability has eroded for many consumers since the start of the pandemic due to the combination of record-high home prices and record-low inventory. Since 2019, home prices have spiked 30%—or about $80,000 for a typical home, while housing inventory has declined to under one million units available for sale. 

Approximately half of all homes currently listed for sale (51%) are affordable to households with at least $100,000 income. Nationwide, nearly half of all Asian households annually earn more than $100,000. However, 35% of White households, 25% of Hispanic households and only 20% of Black households have incomes greater than $100,000. 

Maryland Among Most-Affordable Markets for Blacks

NAR’s analysis found that the most affordable states for Black households to purchase a home are Maryland, West Virginia, Kansas, Ohio and Indiana. Conversely, the least affordable states for Black households are Utah, Oregon, California, Nevada and Rhode Island.

In terms of renter households, half of Black Americans spend more than 30% of their monthly income on rent. Almost three out of 10 Black renter households (28%) and one in five White renter households (20%) are severely cost-burdened—defined as spending more than 50% of monthly income on rent. 

Nationwide, NAR estimates that 47% of White renter households and 36% of Black renter households can afford to buy a typical home when comparing the qualifying income to purchase a home and the median income of renter households.

“Black households not only spend a bigger portion of their income on rent, but they are also more likely to hold student debt and have higher balances,” Lautz added. “This makes it difficult for Black households to save for a down payment and as a result, they often use their 401(k) or retirement savings to enter homeownership.”

Approximately seven in 10 White Americans (69%) said they purchased a home in a neighborhood where the majority of the residents were of the same race. However, about a quarter of Hispanic Americans (26%) and less than a fifth of Black (17%) and Asian Americans (15%) said the same.