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Black Americans Own Disproportionately Small Share of Homes in 50 Largest U.S. Metros
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The COVID-19 pandemic has further exacerbated racial income and wealth inequality in the U.S. — especially for Black Americans, who are already among the most economically disadvantaged groups in the nation.
To highlight a key economic area in which Black Americans are often disadvantaged, LendingTree analyzed U.S. Census Bureau data on homeownership rates for Black residents in the nation’s 50 largest metropolitan areas. Specifically, we compared the share of homes owned by those who identify as Black to the population of Black residents in each metro.
In doing so, we found that Black Americans own a disproportionately small share of homes in each metro featured in our study.
- Black Americans make up 15% of the population across the nation’s 50 largest metros, but they only own 10% of owner-occupied homes across the same areas. For comparison, white Americans across the nation’s 50 largest metros account for 64% of the population — yet they own 76% of owner-occupied houses.
- Black Americans tend to make up a larger share of the population in metros with the largest differences between the percentage of Black owner-occupied homes and the portion of the population that identifies as Black. In contrast, areas with smaller Black populations often see more proportionate homeownership rates among Black residents.
- San Jose, Calif., has the smallest difference between the share of homes owned by Black residents and the share of the population that’s Black. In the metro, 2.41% of the population identifies as Black, while Black homeowners own 1.38% of owner-occupied homes. That’s a difference of 1.03%. Los Angeles and Salt Lake City have the next-smallest differences at 1.31% and 1.32%.
- Memphis, Tenn., has the biggest difference between the share of homes owned by Black residents and the share of the population that’s Black. In Memphis, Black residents make up 47.37% of the population — the largest among any race in the metro. However, they own only 35.05% of occupied housing units in the metro, resulting in a disparity of 12.32%. Just ahead of Memphis at the bottom are Milwaukee (9.96% disparity) and New Orleans (9.35%).
Metros with smallest differences between share of homes owned by Black residents, population that identifies as Black
No. 1: San Jose, Calif.
- Percentage of the population that identifies as Black: 2.41%
- Percentage of Black owner-occupied homes: 1.38%
- Difference: -1.03%
No. 2: Los Angeles
- Percentage of the population that identifies as Black: 6.54%
- Percentage of Black owner-occupied homes: 5.24%
- Difference: -1.31%
No. 3: Salt Lake City
- Percentage of the population that identifies as Black: 1.88%
- Percentage of Black owner-occupied homes: 0.56%
- Difference: -1.32%
Metros with largest differences between share of homes owned by Black residents, population that identifies as Black
No. 1: Memphis, Tenn.
- Percentage of the population that identifies as Black: 47.37%
- Percentage of Black owner-occupied homes: 35.05%
- Difference: -12.32%
No. 2: Milwaukee
- Percentage of the population that identifies as Black: 16.47%
- Percentage of Black owner-occupied homes: 6.51%
- Difference: -9.96%
No. 3: New Orleans
- Percentage of the population that identifies as Black: 34.98%
- Percentage of Black owner-occupied homes: 25.63%
- Difference: -9.35%
What is driving this trend?
The LendingTree study shows that Black Americans in each of the nation’s largest metros own a disproportionately small share of homes relative to their population.
There are many reasons why this might be the case. For example, according to the latest Census Bureau estimates, the median household income for those who identify as Black is $45,870. That’s almost $30,000 less than the $74,912 median income for white households. Black Americans also:
- generally have less household wealth than other races
- often have greater difficulty accessing traditional credit and banking services
- are more likely to be denied a mortgage than members of other races
Further, the legacies of historical policies meant to disenfranchise Black homebuyers, like “redlining,” have had a long-lasting impact that still contributes to the disproportionately low homeownership rates among Black Americans today.
With that said, it’s important to note that while these examples can shed some light on why homeownership rates are relatively low for Black Americans, they’re not all the reasons why a person who identifies as Black may struggle to become a homeowner. And, ultimately, a wide variety of socioeconomic factors continue to drive this unfortunate trend.
Tips for Black homebuyers
Despite this outlook, owning a home isn’t an impossible dream for all Black Americans. Here are three tips that could help make the homebuying process a bit easier.
- Shop around for a mortgage. Though the average rate for a 30-year, fixed mortgage is currently the highest since early 2019, homeowners can still potentially secure a relatively low rate by shopping around for a mortgage. By comparing offers from different lenders, homebuyers may get a more competitive rate that makes buying a home more affordable.
- Know your rights. It’s illegal to deny someone a mortgage or refuse to sell them a house based on their race. If you believe that your rights have been violated during the homebuying process, you can file a complaint with the U.S. Department of Housing and Urban Development (HUD) or with various local housing and human rights commissions.
- Consider different types of mortgages. One of the reasons homeownership rates tend to be disproportionately low among Black homeowners is that Black households often earn smaller incomes. Fortunately, there are many low-income mortgage loans for which Black homebuyers may qualify. By taking advantage of these types of loans, it‘s often easier to get approved for a mortgage and, as a result, easier to buy a home.
This study ranks the nation’s 50 largest metropolitan statistical areas (MSAs) by the difference between the percentage of owner-occupied homes in a metro owned by those who identify as Black (and no other race) and the percentage of an area’s population that identifies as Black (and no other race).
The further this difference is from zero, the more disproportionate the number of Black homeowners in an area is. A positive difference would indicate that Black homeowners own a disproportionately large share of homes. In contrast, a negative difference indicates that Black homeowners own a disproportionately small percentage of homes.
The population, homeownership, home price and income data used in this study are from the U.S. Census Bureau’s 2020 American Community Survey with five-year estimates.