Middle-class African-American and Hispanic families are increasingly finding it difficult to attain homeownership, a new study by the real estate brokerage Redfin reveals.
From 2012 to 2016, the percentage of affordable homes across 30 metros decreased by about the same amount for white families as it did for Hispanic and African-American families. Yet, “given the already lower rate of homeownership among minority families, the decrease has left those groups with so few affordable homes for sale that they’re essentially priced out of the market in several major cities,” the report reads.
For example, in 2016, just 18 percent of homes in the 30 largest metros were affordable for those earning the median income for Hispanic households. Fourteen percent of homes were affordable for families earning the median income for African-American households. Further, both rates had dropped 11 percentage points from 2012. As comparison, 30 percent of homes were affordable to white households earning the median income, but still notably down 12 percentage points since 2012.
Of the 30 markets analyzed, researchers found that St. Louis was the only market that became more affordable for both median-income Hispanic and African-American households from 2012 to 2016.
Elsewhere, the racial gap in affordability grew, most pronounced in Minneapolis. There, the average white household could afford 66 percent of the homes for sale compared to 5.2 percent of African-Americans earning the median income and 24.8 percent of Hispanic households.
Denver had the smallest racial gap. Less than 2 percent of homes for sale were affordable to families earning the median income for African-American and Hispanic households compared to only 8.3 percent for families earning the median income for white households, according to the report.
“Lack of affordability in Denver, Los Angeles, Portland, San Francisco, San Diego, and Phoenix is especially severe,” writes Nela Richardson, Redfin’s chief economist, about the study’s findings. “Each of these markets has fewer than 5 percent of homes for sale affordable for those at the median income level for African-American and Hispanic families.”
Read the full report, suggesting a list of possible solutions.
Source: “Priced Out: The Housing Affordability Gap in America’s Largest Metros,” Redfin Research Center (May 31, 2017)
