Racial Minority Groups Increase Homeownership Rates

Homeownership rates for racial minorities increased in 2022, with Asian and Hispanic Americans achieving historic peaks, according to the National Association of Realtors®’ 2024 Snapshot of Race and Home Buying in America.

Despite these advancements, disparities persist among racial and ethnic groups, notably with Black homeownership lagging. People of color continue to endure significant buying challenges throughout and after their home purchases, according to the report.

“Seeing that Asian and Hispanic homeownership rates have reached all-time highs should be celebrated, but there continue to be headwinds for minority buyers, especially Black Americans, who are facing a lot of hurdles to achieving homeownership,” said Dr. Jessica Lautz, NAR deputy chief economist and vice president of research.

Lautz said housing affordability is one of the biggest challenges to all buyers, specifically first-time buyers. “We expect home prices will continue to increase because of the lack of inventory. Building more homes and more affordable homes is important because the typical person may not have a dual income, may not have children and want a smaller place, and that type of inventory is pretty thin. There’s a lot of demand for smaller units, whether from first-time buyers, homeowners who are downsizing, cash buyers or investors, which means there’s a lot of competition.”

“Black homebuyers are seeing higher denial rates when applying for mortgages. Our research shows that Black homebuyers are more likely to be carrying larger amounts of college debt, and many are single buyers and have lower household income as well,” she added.

The 2024 Snapshot of Race and Home Buying in America delves into homeownership trends within each racial group and explores obstacles encountered in the pursuit of homeownership. Leveraging NAR’s 2023 Profile of Home Buyers and Sellers data, the report also explores the demographics of home buyers, motivations for purchasing, types of properties acquired and financial profiles – specifically focusing on racial distinctions.

Lautz said, “More than half of all minority groups were first-time buyers, which shows they were able to overcome really enormous hurdles to become homeowners, but it’s a smaller share than white homeowners.”

She added, “Keep in mind that the data NAR looked at was for successful homebuyers. We’re not able to include information from renters who may have college debt who can’t buy, so it’s hard to fathom the debt they may be facing and how out of touch homeownership may be.”

Nationwide, homeownership was 65.2% in 2022, similar to the rate in 2021. The rates vary significantly when the trends are separated by race. The homeownership rate for whites was 72.3%; for Asians, 63.3%; 51.1% for Hispanics and 44.1% for Black Americans.

In Pennsylvania, the report shows homeownership rates for white Americans higher than the national rate at 74%. The state homeownership rate for Asian Americans in Pennsylvania was 62%, Hispanics was 48% and for Black homeowners it was 45%.

Lautz said in this year’s study, researchers were able to look at the share of individuals reaching the age when they consider homeownership.

“I think there is a potential to narrow the homeownership gap in Pennsylvania for Asian and Hispanic buyers because we can see a large part of the population reaching the age of potential homebuyers,” she added. “Looking at the diversity of the millennials and Gen Zers, we’re having a growth in those populations.”

The research also examined affordability challenges for renter households across racial groups. As rental costs escalate, they tighten renters’ ability to accumulate savings for a down payment. This challenge is amplified among minority groups, who often face additional systemic barriers and disparities in income and wealth, further exacerbating their struggle to achieve homeownership.

In Pennsylvania, 29% of white renter households can afford to buy the typical home, compared to just 17% of Black renters who can afford to buy a home. For Asian renters, 50% can afford to buy a home and 23% of Hispanic renters can afford to buy.

“This is an important component to consider how many people can actually afford to purchase a home within the state,” Lautz added.

“The impacts of housing affordability and limited inventory are more extreme for minority buyers, because more than half are first-time buyers who must rely on down payment sources beyond gained housing equity,” Lautz explained.