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Newsweek
Homeownership among Black Americans, which saw a modest uptick in 2022 compared with the year before, is expected to soar in the future as a result of changing demographics, according to a report by the National Association of Realtors® (NAR).
A new study published by NAR on Tuesday, which examined the homeownership rate by race and the experience of recent homebuyers in the real estate market, showed that the number of Black, Hispanic and Asian Americans owning a home continued growing despite fast-rising mortgage rates in 2022.
According to the report, titled "Snapshot of Race and Home Buying in America," the Black homeownership rate reached 44.1 percent in 2022, growing by 1.6 percentage points from 2012, while Hispanic homeownership reached 51.1 percent (up 5.4 points from 2012) and Asian homeownership 63.3 percent (up 6.1 points from 2012). The rate among White homeowners fell slightly, though it's still the highest in the country at 72.3 percent (up 3.1 points from 2012).
This means that despite the progress in the past few years, the Black homeownership rate is still trailing behind all others, including by 28 percentage points compared with White homeowners.
However, the Black homeownership rate is expected to rise in the future, as Baby Boomers—those born between 1946 and 1964—leave their homes vacant and younger, more diverse generations take on the U.S. housing market.
"Millennials and Generation Z are more racially and ethnically diverse," Jessica Lautz, Deputy Chief Economist and Vice President of Research at NAR, told Newsweek. "While all first-time buyers are facing challenges in entering into homeownership, as more young buyers enter into the home buying market, there will be a rise in minority owners."
Millennials have delayed the process of buying a home for years while they waited for better times to buy between the 2008-9 financial crisis and the pandemic, but they're now flocking to the market, contributing to keep demand and prices up. As the largest generation in the U.S., Millennials are shifting the housing market in many ways—including making it more diverse.
According to the NAR report, 1.5 million Black households are expected to turn the median homebuying age over the next five years, as are 775,000 Asian households and 2.2 million Hispanic households.
However, significant barriers to homeownership among Black Americans remain.
"The new research continues to show that Black potential home buyers are hurt more by rental affordability and student debt, which make saving for a downpayment difficult," Lautz said.
"Additionally, there is a higher denial rate for mortgages for Black buyers."
These are not the only hurdles they face.
"If a Black potential buyer does successfully save for a downpayment and is approved for a mortgage, they often have a limited pool of homes which they can afford to purchase based on their household income," Lauz said. "Also, more than half of Black buyers are first-time buyers, which means they do not have housing equity to use for a downpayment."