Feb 18, 2020
SEATTLE, Feb. 18, 2020 /PRNewswire/ -- Recent trends in the black homeownership rate show an increasing number are becoming homeowners. The homeownership rate for black households jumped 3.4 percentage points over the second half of 2019, bringing it from a three-decade low to back near historic averagesi. A deeper analysis by Zillow® revealed some metro areas across the U.S. where the black homeownership rate is higher than other large metros with comparably sized black populations.
The black homeownership rate has experienced its share of ups and downs in the past half-century -- gains during the last half of the 20th century, then an outsized drop during the mid-2000s housing bust before these recent signs of a bounceback. The rate of homeownership for black households rose from 41.6% in 1970 to a peak of 46.5% in 2007. But homeowners of color were hit the hardest during the Great Recession, and by 2016 the black homeownership rate had plummeted all the way below 1970 levels. At the end of 2019, 44% of black households owned their home, an increase from lows hit during 2016 but still below the 2007 peak.
Across the U.S., the black homeownership rate lags behind that of non-black households in each of the 45 large metros included in this analysis, but it now sits above its mid-decade averageii in more than half. This rate has grown the most since mid-decade in Sacramento (+7.8 percentage points), Phoenix (+5.4), Orlando (+5.3), San Francisco (+4.4) and Portland (+3.9).
And in some cases, the rate of growth in the black homeownership rate has exceeded that of all other households since mid-decade, meaning the deficit is shrinking. Black households have closed the gap the most in Sacramento (6.5 percentage points closer), Orlando (4.1) and Cincinnati (3.2).
In general, areas with a higher share of black residents have a higher black homeownership rate. The large metros with the highest black homeownership rate are Birmingham (52.2%), Washington, D.C. (51.4%), Richmond (49.9%) and Atlanta (48.2%). These metros rank seventh, eighth, fifth and third, respectively, with the highest share of black residents.
There are some areas where the black homeownership rate is higher than might be expected based on the area's black population. San Antonio has the 37th-highest share of black residents among those included in this analysis, but the black homeownership rate there (42.9%) ranks 14th. The situation is similar in Riverside (15th-highest black homeownership rate; 35th-highest share of black residents), Orlando (6th-highest black homeownership rate; 24th-highest share of black residents) and Sacramento (23rd-highest black homeownership rate; 39th-highest share of black residents).
"Homeownership has been a key path to wealth creation and stability for generations of Americans," said Jeff Tucker, a Zillow economist. "It appears that now, more than 10 years after a housing bust that hit black homeowners the hardest, more black families are beginning to move into homeownership. The remaining gap from the 2007 peak shows a long road ahead in the recovery, but this is a step in the right direction."
According to the Zillow Group Consumer Housing Trends Report, black home buyers are more likely to be at least somewhat concerned about qualifying for a mortgage (59%) than white buyers (46%). And buyers of color are more likely to be denied financing at least once before being approved for a mortgage (76%) than white buyers (15%).
New York, NY
Los Angeles, CA
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Saint Louis, MO
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San Antonio, TX
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Virginia Beach, VA
New Orleans, LA
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i According to the most recent quarterly data from the U.S. Census Bureau's Housing Vacancy and Homeownership Survey and annual data from the American Community Survey.
ii Comparing annual 2018 homeownership rates from the American Community Survey to the average of the 2014, 2015 and 2016 annual homeownership rates.
For further information: Alex Lacter, Zillow, email@example.com