Millennials are helping to boost the African American homeownership rate, according to a recent analysis of data by the National Association of Realtors.
Just over 5% of African Americans bought a home during the first three months of 2020, up more than 1% from the year before, the NAR’s data shows.
“The fact that Black home purchases are much higher now compared to before the pandemic is quite a surprise,” said Lawrence Yun, chief economist of the NAR.
Yun said he expects the trend to continue, and that it will be led by younger Black buyers aged between 26 and 39 years old, who he said have led the increase in homeownership rates.
However, he said the uptick in African American home purchases doesn’t reflect the economic condition of all Blacks during the COVID-19 pandemic. He said Black Americans as a whole have experienced significant job losses due to the pandemic, and that the wealth gap between whites and Blacks continues to widen.
Although the homeownership rate for African Americans is rising, it still remains well below that of whites, Asians and Hispanics, according to data from the Census Bureau. As of the third quarter, the Black homeownership rate stood at 46.4%, while for whites it was 67.4%.
In a recent report from Morgan Stanley that looked at minority homeownership rates, it was found that Black and Hispanic mortgage applicants still experience a disproportionate rate of home loan application denials. It found that 16% of Black households and 12% of Hispanics had their mortgage applications rejected in 2019, versus just 8% of white households.
Morgan Stanley's report said that by fixing this disparity, the U.S. could add 4.9 million more households to its total, as well as 784,000 new jobs and $400 billion in tax revenue.