Homeownership

Racial Disparities in Homeownership

The racial gap in homeownership is staggering. Nearly a 30 percentage point difference currently separates the white homeownership rate (now over 70%) from that of Black and Hispanic households. A history of redlining, which denied Black households access to credit, has played a significant role in depressing minority homeownership. Disparities in homeownership also contribute to the racial wealth gap, as owning a home and building equity is the primary means to accumulate wealth in the United States.

Shortage of Affordable Homes for First-Time Homebuyers

After decades of decline, the supply of entry-level housing is far too low to meet the rising demand of first-time buyers. Developers are not building enough starter homes: only 65,000 entry-level homes were built in 2020 compared to nearly 420,000 in 1970. Since the scarcity of entry-level homes inflates prices, it not only makes them harder to find but more expensive too. Other barriers to first-time homeownership exist: wages remain stagnant and potential buyers have high levels of student loan debt. Many homebuyers are struggling to afford down payments.