Nov 7, 2022 - Economy

Black and Latino homeownership rates increased during the pandemic

Data: Urban Institute analysis of ACS data; Map: Jared Whalen/Axios
Data: Urban Institute analysis of ACS data; Map: Jared Whalen/Axios

Black and Latino homeownership rates increased significantly from 2019 to 2021, according to new data from the American Community Survey analyzed by the Urban Institute.

Why it matters: The increase, highlighted recently in a separate analysis by the Washington Post, comes after years of decline in the wake of the Great Recession, and despite the fact that the economic hardships of COVID fell disproportionately on those groups.

  • However, the period of progress might have been fleeting. High mortgage rates are now pricing many buyers, particularly first-timers, out of the market.

What happened: Record low mortgage rates and COVID-era government fiscal support drove up homeownership for white buyers, too — but their increase was relatively smaller.

  • Black homeownership increased two percentage points to 44%, according to data from the ACS. Hispanic homeownership rose 2.5 points to 50.6%.
  • White homeownership ticked up 1.2 points to 73.3%.
  • The increase was larger for Black and Latino buyers because their homeownership rates were so much lower to begin with, said Mike Calhoun, the president of the Center for Responsible Lending.
  • Age trends played a role, too, notes the Urban Institute: In 2021, Black and Latino Americans' median ages were 35.3 and 30.5, respectively — aka, buying a first home age — compared with 43.9 for white Americans.

Go deeper: Stimulus checks and the student loan payment pause helped folks save for down payments.

  • "Unaffordable student debt is one of the major obstacles to Black families obtaining homeownership," Calhoun said, noting a survey that found 9% of student loan borrowers put savings from the pause toward buying a home.
  • Rising rents also pushed some to act, the Washington Post points out in its analysis.

Meanwhile, other types of pandemic relief — like a forbearance program that allowed a pause on mortgage payments, and expanded unemployment insurance — allowed homeowners to keep their homes.

  • A higher proportion of Black and Latino families took advantage of these programs, according to data from the Consumer Financial Protection Bureau.
  • That's a big change from what happened after the Great Recession when a lot of these folks lost their houses to foreclosure and homeownership rates fell.
  • "The difference is truly remarkable," Calhoun said, adding that if such steps hadn't been taken at the outset of the COVID crisis, more than a million people probably would've lost their homes.

Reality check: While the increases in homeownership rates are notable, the racial homeownership gap barely budged.

  • "Increasing Black and Latino homeownership at these rates would not be enough to close the racial homeownership gap within a promising timeline," said Jung Hyun Choi and Amalie Zinn, the authors of the Urban Institute analysis, in an email.
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