Today's Date: April 20, 2024
Coming into Force of Algonquins of Pikwakanagan First Nation's Child and Family Services Law, Nigig Nibi Ki-win   •   USAA to Gift Vehicles to Military and Their Families in 2024   •   Energy Transition Accelerator Advances with New Secretariat, Expert Consultative Group   •   T2EARTH Celebrates Earth Day by Leading the Wood Products Industry towards a Sustainable Built Environment   •   T2EARTH Launches Official YouTube Channel – T2EARTH Talks   •   Statement from the Minister of Indigenous Services on the preliminary findings from the United Nations Special Rapporteur on the   •   Divert Announces Purchase of New Site in Lexington, North Carolina for Future Integrated Diversion & Energy Facility   •   University of Phoenix College of Nursing Faculty Leadership Selected for Prestigious Fellows of the American Association of Nurs   •   Island Fin Poké Co. Celebrates Earth Day by Sharing Its Sustainable Efforts Toward a Greener Earth   •   H2 Green Mining and Ohmium Sign Agreement to Boost Green Hydrogen in Chile   •   Boys & Girls Clubs of the Valley and Ross Stores Celebrated 10-Year Anniversary of "Help Local Kids Thrive" In-Store Fundrai   •   Kellanova and Shaw's join No Kid Hungry to help end summer hunger for kids and families in Maine   •   Prime Minister announces appointment of the next Commissioner of the Northwest Territories   •   LS Cable & System Welcomes $99 Million Investment Tax Credit Under Section 48C of the Inflation Reduction Act   •   Engel & Völkers Dallas Fort Worth Presents $20,824 to Special Olympics   •   Eaton to announce first quarter 2024 earnings on April 30, 2024   •   Hartford HealthCare makes Earth-friendly pledge of carbon neutrality by 2050   •   Strengthening Canadian research and innovation   •   Clarification of Details Regarding Oceansix's Engagement with RB Milestone Group LLC   •   El Car Wash Partners With “CARD” to Support Neurodiversity in the Workplace
Bookmark and Share

Gap between Black and white renting families who could afford a mortgage narrowed significantly during the pandemic

Gap between Black and white renting families who could afford a mortgage narrowed significantly during the pandemic

PR Newswire

Study underscores that factors not related to income are keeping the Black-white homeownership gap wide

  • Racial mortgage affordability gap shrunk by more than a third since 2012
  • Among all races, renting families able to afford a mortgage dropped by nearly half from 2021 to 2022
  • White households own homes at a 73% rate, while Black households own at 44%, with over half of the top 50 metros showing a gap of 30 points or more

SEATTLE, Feb. 23, 2024 /PRNewswire/ -- The gap between the share of Black and white renting families that could comfortably afford a mortgage payment shrunk significantly during the pandemic, a new Zillow® report shows. Despite this progress, a notable homeownership gap and disproportionate rate of mortgage denials persists, suggesting that other barriers not related to income are also impeding Black families' access to homeownership.

In 2022, approximately 38.6% of 138 million U.S. families1 were not homeowners, according to the American Community Survey. Among those, more than 6.3 million families were considered "income mortgage-ready,"2 meaning their income would allow for paying a typical mortgage payment in their area without being cost burdened

About 7.8% of Black non-home owning families were income-ready for a mortgage, compared to 12.5% of white families — a gap of 4.7 percentage points. While significant, the gap shrunk by more than one-third since 2012, when it stood at 7.9 percentage points.

"Despite the significant decline in mortgage affordability in the past two years, millions of families who do not own their home have the means to afford the largest share of a homeowner's cost — the mortgage," said Zillow Senior Economist Orphe Divounguy. "While some families may choose to rent, many are simply constrained. It's crucial to recognize the existence of additional barriers beyond monthly cost, including access to funds for a down payment and closing costs — as well as other barriers that significantly contribute to mortgage denials, like insufficient credit scores and lack of access to credit. These barriers especially impact people of color."

Still, among all races, the number of renting families able to afford a mortgage dropped to 6.3 million in 2022 from 12.9 million in 2021, as mortgage rates doubled. While higher mortgage rates and higher prices affected everyone, the median family income of renters rose more for Blacks than for whites since 2012. Regions where Black family incomes rose most generally experienced a greater decline in the racial mortgage readiness gap during the 2012 to 2022 period.

Detroit has the highest share (13.3%) of Black renting families earning enough income to comfortably afford a mortgage, followed by Memphis (12.8%), St. Louis (12.0%), Houston (11.6%) and Cleveland (11.2%). While home values are relatively lower in those communities and more Black families could afford the typical mortgage payment, access to homeownership remains a challenge.

Racial disparities in home values, homeownership rates and credit security

Even though the incomes of Black renting families rose faster during the pandemic, significant disparities persist in homeownership rates and home values between Black and white Americans. Nationally, white households owned homes at a much higher rate (73%) than Black households (44%), and the gap exceeded 30 percentage points in more than half of the country's 50 largest metros in 2022.

Compounding the issue, the typical home owned by a white family is still worth far more than the typical home owned by a Black family. Although there has been incremental progress in narrowing the home value gap, it still exceeds 10 percentage points in 42 of the top 50 metro areas.

Discriminatory lending practices and higher denial rates for Black mortgage applicants, compounded by credit history issues, also pose challenges to housing equity. In 2022, Black applicants saw a 146% higher mortgage loan denial rate compared to white applicants, potentially hindering future generational wealth transfer. Credit history is the most common reason cited for these denials.

Initiatives aimed at things like enhancing access to down payment assistance and credit-building opportunities as well as implementing reforms in zoning, together with efforts to construct and preserve affordable housing in thriving communities, are vital.

Housing Inequalities by Race

Top 50 metros

Share of Black Families

That Can Afford the Typical 

Mortgage 

Without Cost Burden

(non owners)

Share of White Families

That Can Afford the

Typical Mortgage

Without Cost Burden

(non owners)

Share of Families

That Can Afford the

Typical  Mortgage

Without Cost Burden

(overall; all races)

Typical Home

Value Gap:

White vs. Black

Households

(in percentage points)

Homeownership Gap:

White vs. Black

Households

(in percentage points)

United States

7.8 %

12.5 %

11.9 %

17.9 pp

28.9 pp

New York, NY

2.6 %

11.5 %

6.9 %

15.7 pp

33.0 pp

Los Angeles, CA

1.1 %

4.2 %

2.1 %

30.8 pp

25.7 pp

Chicago, IL

8.3 %

21.9 %

16.3 %

39.4 pp

33.5 pp

Dallas, TX

6.5 %

13.5 %

10.6 %

22.5 pp

30.2 pp

Houston, TX

11.6 %

19.3 %

13.7 %

22.9 pp

29.2 pp

Washington, DC

6.2 %

12.8 %

9.1 %

9.6 pp

19.1 pp

Philadelphia, PA

7.3 %

15.2 %

12.8 %

28.3 pp

27.1 pp

Miami, FL

4.7 %

13.1 %

7.2 %

22.2 pp

27.2 pp

Atlanta, GA

8.1 %

12.0 %

10.1 %

17.7 pp

24.3 pp

Boston, MA

2.8 %

5.4 %

4.8 %

18.1 pp

31.3 pp

Phoenix, AZ

4.2 %

5.5 %

4.4 %

14.2 pp

33.7 pp

San Francisco, CA

0.3 %

4.2 %

2.5 %

29.2 pp

29.2 pp

Riverside, CA

4.4 %

3.8 %

3.5 %

1.2 pp

30.6 pp

Detroit, MI

13.3 %

19.6 %

18.6 %

45.4 pp

34.0 pp

Seattle, WA

2.3 %

4.5 %

4.5 %

16.7 pp

34.3 pp

Minneapolis, MN

7.1 %

7.8 %

7.7 %

14.0 pp

46.0 pp

San Diego, CA

1.7 %

2.1 %

1.8 %

24.4 pp

32.3 pp

Tampa, FL

5.4 %

10.6 %

9.2 %

11.3 pp

27.0 pp

Denver, CO

1.3 %

4.2 %

3.6 %

12.7 pp

26.0 pp

Baltimore, MD

10.0 %

13.4 %

12.1 %

16.9 pp

30.8 pp

St. Louis, MO

12.0 %

17.6 %

17.3 %

44.7 pp

32.9 pp

Orlando, FL

6.3 %

10.0 %

7.6 %

13.2 pp

24.4 pp

Charlotte, NC

7.0 %

12.6 %

10.2 %

18.2 pp

31.5 pp

San Antonio, TX

4.9 %

16.6 %

10.1 %

10.5 pp

28.0 pp

Portland, OR

2.8 %

3.1 %

3.1 %

3.7 pp

38.9 pp

Sacramento, CA

2.1 %

3.8 %

3.2 %

5.8 pp

28.5 pp

Pittsburgh, PA

10.9 %

20.1 %

19.7 %

26.6 pp

39.9 pp

Cincinnati, OH

6.8 %

13.4 %

12.8 %

18.9 pp

39.5 pp

Austin, TX

6.4 %

6.3 %

5.5 %

22.0 pp

23.9 pp

Las Vegas, NV

3.6 %

7.5 %

5.4 %

5.1 pp

34.0 pp

Kansas City, MO

7.9 %

15.7 %

13.6 %

25.1 pp

32.5 pp

Columbus, OH

10.7 %

13.6 %

12.9 %

20.6 pp

36.2 pp

Indianapolis, IN

9.9 %

16.4 %

14.6 %

9.4 pp

33.3 pp

Cleveland, OH

11.2 %

23.8 %

19.1 %

40.6 pp

36.0 pp

San Jose, CA

0.0 %

3.5 %

1.9 %

17.6 pp

33.9 pp

Nashville, TN

3.0 %

7.3 %

6.3 %

14.4 pp

27.6 pp

Virginia Beach, VA

7.9 %

13.4 %

10.2 %

7.1 pp

27.9 pp

Providence, RI

2.3 %

5.1 %

4.8 %

10.1 pp

26.0 pp

Jacksonville, FL

9.5 %

9.9 %

9.9 %

21.1pp

27.2pp

Milwaukee, WI

5.3 %

12.5 %

10.4 %

38.2 pp

43.9 pp

Oklahoma City, OK

10.1 %

17.0 %

15.6 %

19.3 pp

33.9 pp

Raleigh, NC

3.5 %

8.1 %

6.6 %

15.5 pp

24.9 pp

Memphis, TN

12.8 %

20.8 %

16.2 %

32.7 pp

31.2 pp

Richmond, VA

9.0 %

12.1 %

12.2 %

13.0 pp

21.8 pp

Louisville, KY

9.3 %

14.5 %

13.3 %

29.4 pp

38.1 pp

New Orleans, LA

5.3 %

17.4 %

11.3 %

22.4 pp

26.4 pp

Salt Lake City, UT

5.8 %

3.6 %

3.0 %

7.5 pp

45.0 pp

Hartford, CT

9.4 %

13.5 %

15.7 %

23.4 pp

32.5 pp

Buffalo, NY

9.5 %

14.1 %

13.4 %

41.5 pp

33.1 pp

Birmingham, AL

9.9 %

11.1 %

11.5 %

46.4 pp

28.0 pp

About Zillow Group:

Zillow Group, Inc. (NASDAQ: Z and ZG) is reimagining real estate to make home a reality for more and more people. As the most visited real estate website in the United States, Zillow and its affiliates help people find and get the home they want by connecting them with digital solutions, great partners, and easier buying, selling, financing and renting experiences.

Zillow Group's affiliates, subsidiaries and brands include Zillow®, Zillow Premier Agent®, Zillow Home Loans℠, Trulia®, Out East®, StreetEasy®, HotPads®, ShowingTime+, Spruce® and Follow Up Boss®.

All marks herein are owned by MFTB Holdco, Inc., a Zillow affiliate. Zillow Home Loans, LLC is an Equal Housing Lender, NMLS #10287 (www.nmlsconsumeraccess.org). © 2023 MFTB Holdco, Inc., a Zillow affiliate.

1 For the purpose of this analysis, "family" refers to a related group within a household, as identified in the American Community Survey.

2 This assumes a family can only afford a 3% down payment at the highest mortgage rate recorded each year based on applications submitted to the Freddie Mac from lenders across the country. A lower down payment implies higher monthly mortgage payments, raising the threshold income needed to be considered mortgage ready in this analysis.

 

Cision View original content to download multimedia:https://www.prnewswire.com/news-releases/gap-between-black-and-white-renting-families-who-could-afford-a-mortgage-narrowed-significantly-during-the-pandemic-302069705.html

SOURCE Zillow



Back to top
| Back to home page
Video

White House Live Stream
LIVE VIDEO EVERY SATURDAY
Breaking News
alsharpton Rev. Al Sharpton
9 to 11 am EST
jjackson Rev. Jesse Jackson
10 to noon CST


Video

LIVE BROADCASTS
Sounds Make the News ®
WAOK-Urban
Atlanta - WAOK-Urban
KPFA-Progressive
Berkley / San Francisco - KPFA-Progressive
WVON-Urban
Chicago - WVON-Urban
KJLH - Urban
Los Angeles - KJLH - Urban
WKDM-Mandarin Chinese
New York - WKDM-Mandarin Chinese
WADO-Spanish
New York - WADO-Spanish
WBAI - Progressive
New York - WBAI - Progressive
WOL-Urban
Washington - WOL-Urban

Listen to United Natiosns News