Black Homeownership Rates Have Declined in the Past 10 Years -- and That's a Problem

New data reveals very little progress.

These days, buying a home is a very expensive prospect. That's because property values have soared in the pandemic, and they don't appear to be slowing down.

In spite of that, demand for homes has been high. We can thank low mortgage rates for that. In fact, more Americans own homes now than in any year since the Great Recession.

In 2020, the U.S. homeownership rate rose to 65.5%. But the rate of Black homeownership is much lower at only 43.4%. Not only that, but the rate of Black homeownership is lower than a decade ago. And it's nearly 30 percentage points below the White homeownership rate of 72.1%.

Affordability is a problem

Since 2019, home prices have risen 30%, an average of about $80,000 for a typical home. And due to long-standing economic disparities, among other factors, that puts Black buyers at a disadvantage. And that disadvantage could have lasting consequences.

Homeownership can, for many people, lead to more financial stability. That's because people who own homes can build equity in those properties, which can serve as a cash source when needed (such as borrowing via a home equity loan or line of credit).

Also, homes tend to appreciate in value over time. So someone who owns a home might, after 20 years, be in a position to sell it for many, many thousands of dollars more than what they paid. Renters, by contrast, don't get anything in exchange for the money they pay their landlords, other than a roof over their heads, temporarily.

But speaking of rent -- an estimated half of Black renter households spend more than 30% of their income on rent. And 28% spend half or more of their income on rent. And those high percentages mean it's harder to save funds for a down payment.

More work needs to be done

As part of his campaign, Joe Biden promised to work on narrowing the homeownership gap between White and Black buyers. He floated the idea of a first-time home buyer's credit to help lower-income Americans overcome some of the barriers to purchasing a home. He also said he planned to address unfair lending practices in the mortgage industry -- practices that have been discriminatory to Black buyers for years.

So far, not much has happened on the housing front -- though to be fair, the Biden administration is grappling with a pandemic, an economic crisis, and now a war in Europe. But the struggle to buy homes is very real for Black Americans. Let’s hope lawmakers will take steps soon to address Black homeownership rates lower than they were 10 years ago, a clear lack of progress.