Black buyers are getting pushed out of the housing market faster than anyone else

A family in their new home.
A family in their new home.
  • Homeownership is becoming unaffordable for many Americans. 
  • Only 245,300 homes for sale are affordable to those earning the US median income of $75,000 to $100,000.
  • Black Americans, especially, have taken major financial blows during the pandemic.

Housing affordability just hit an all time-low  —  and it's making homeownership especially unattainable for Black Americans.

According to the National Association of Realtors (NAR), only 245,300 of the homes currently listed for sale are affordable to households earning between $75,000 and $100,000. That is a steep decline from the 656,200 homes that were affordable in 2019, prior to the pandemic.  

"The surging residential real estate market of the last two years led to record-high home prices and record-low inventory," NAR researchers wrote. "This simultaneous 'double trouble' has made it increasingly difficult for consumers, particularly Black Americans, to achieve homeownership."

Although homeowners have become equity rich throughout the pandemic, it's had an adverse impact on homebuyers. In December, affordability reached a 10-year low as a lack of housing supply drove home price growth. This has made homeownership unaffordable for many, particularly Black Americans – many of who earn less than the US median income

"The Black homeownership rate currently remains the lowest in the country, underscoring how the challenging COVID housing market has compounded long standing systemic issues faced by today's Black buyers,"  George Ratiu, Realtor.com Manager of Economic Research, told insider. 

Purchase power is still falling for Black households

Black Americans are still earning less than their peers and it's impacting their ability to afford homeownership. 

A study from the Urban Institute highlights that Black Americans have some of the lowest earnings compared with white men. The organization calculated that in 1963 white families had a median wealth of about $45,000 more than families of color. By 2019, the gap had grown to about $165,000 more than Black families and about $153,000 more than Latinx families.

"Over the past half a century, the difference in net worth held by families of color compared with white families has expanded substantially and is likely to grow amid the COVID-19 pandemic," UI researchers wrote. 

The pandemic has had a tremendous impact on the finances of Black households. This is because Black Americans typically work in industries that have been hit the hardest by the pandemic. As the demographic continues to experience wage and job losses, it's diminishing their purchasing power. 

"[Before the coronavirus hit] the Black employment rate was improving," Daryl Fairweather, Redfin Chief Economist, told  USA TODAY. "When employment improves and incomes improve, that's when you start to see homeownership rates improve. The pandemic derailed that."

In 2021, the homeownership rate was 73.8% for white households and 45.1% for Black households, according to the University of Houston. The homeownership rates represent an almost 29-point difference percentage gap.

Until substantial financial gains can be made for Black Americans, the housing market will need to soften to ensure housing remains affordable for all. To do this, more homes will need to be built to meet demand and slow price appreciation. If not, many Black Americans will be squeezed out of homeownership. 

Are you a Black homebuyer who is having a hard time finding an affordable home? Reach out to this reporter at alloyd@insider.com to share your story.

Read the original article on Business Insider


Contributer : Business Insider https://ift.tt/QcvMhqS
Black buyers are getting pushed out of the housing market faster than anyone else Black buyers are getting pushed out of the housing market faster than anyone else Reviewed by mimisabreena on Tuesday, February 15, 2022 Rating: 5

No comments:

Sponsor

Powered by Blogger.