NAR Reports How Race Impacts Homeownership

Homeownership among minorities in the U.S. continues to trail behind non-Hispanic white Americans, the National Association of Realtors® report “Snapshot of Race & Home Buying in America” found earlier this week.

The homeownership rate for black Americans is 42% in Pennsylvania and is 41% in the U.S. Who represents black homebuyers? The median age of a black homebuyer is 48, the same as non-Hispanic white Americans, while the median income is $75,000. The majority (51%) of black homebuyers are first-time buyers, and 77% buy previously-owned homes. Eighty-eight percent used a Realtor® and the median home price was $228,000.

Married couples represent the biggest percentage of households, at 49%, followed by single women at 34%. Single black men only represent 9% of homebuyers. What leads African Americans to homeownership? Forty-six percent reported a desire to own, while 8% said they wanted a larger home. The majority of homebuyers bought a detached single-family, and 22% purchased a home for multi-generations.

However, 13% of buyers were rejected for a mortgage loan, with 62% reporting it was due to their debt-to-income ratio. The National Association of Real Estate Brokers’ 2019 State of Housing in Black America found that black homeownership still remains below the level in 1968, the time of the passage of the Fair Housing Act.

“These numbers are shocking to read,” said PAR President William Festa. “We’d like to think that homeownership rates among black Americans would be higher than they were before the Fair Housing Act was enacted. It’s so important for Realtors® to recognize the importance of the Fair Housing Act. NAR’s new Fair Housing Action Plan is called ‘ACT,’ which stands for (A)ccountability, (C)ulture Change and (T)raining, is one of the ways NAR is continuing to address this issue.”

Homeownership among Asians in the commonwealth is slightly larger, at 58%, which is above the national average of 53%. Seventy-eight percent of Asian homeowner households are married couples, followed by 7% of single females and 6% of single males. Thirty-eight percent reported they bought their house due to a desire to own and 15% were seeking a larger residence.

The median age of Asian homebuyers is 38, with an income of $110,770. Fifty-one percent are first-time buyers and 77% buy previously-owned homes. Nine in 10 purchased using an agent and the median home price is $435,000. A majority of Asian/Pacific Islander homebuyers said commute to their job is an important factor when considering must-have features. Only 4% were rejected for a mortgage loan, and 22% were rejected due to a lack of sufficient down payment.

For the Hispanic/Latino/ Mexican/Puerto Rican population, the homeownership in Pennsylvania is 41%, below the U.S. average of 45%. The median buyer age is lower than other ethnicities, at 41, but has the highest percentage of first-time buyers at 54%, and only 13% are buying new construction. Ninety percent used a Realtor®, with a median home price of $255,000, and 18% bough a multi-generational home. The majority (81%) of homes purchased were detached, single-family ones.

Sixty-three percent of owners are married couples, followed by 17% of single females. Forty-two percent said they bought due to desiring owning their own property.

Comparatively, the homeownership for non-Hispanic whites in Pennsylvania is 73%, 2% above the national average. Thirty percent represent first-time buyers, and only 11% buy new construction. The median age of a white buyer is 48 with a median income of close to $95,000.

Surprisingly, nearly one-third of white owners said they made no compromises when purchasing their home. Owners were most likely to purchase because they wanted to be homeowners or to be closer to family or friends. Eighty-three percent bought a detached, single-family home, while 11% bought a multi-generational home.

While homeownership in the U.S. is on the rise, reaching 65.1% at the end of 2019, there is still a large discrepancy in homeownership rates across ethnicities.