Home values grew faster in majority-white neighborhoods in 2022, Redfin finds
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If you're looking for affordable housing in America, much of it is in majority-Black neighborhoods, thanks in large part to the legacy of structural racism. The average such home costs less than half the price of a house in areas where most people are non-Hispanic whites, which is one major driver of gentrification.
Why it matters: Black Americans have a higher proportion of their wealth tied up in home equity than their white counterparts, but the value of that home equity has been growing much more slowly.
- In 2019, per the Fed's Survey of Consumer Finances, the average Black family had a net worth of $142,500, of which about $90,000, or 63%, was equity in the family's primary residence.
- In comparison, the average non-Hispanic white family had a net worth of $983,400, of which $261,500, or 27%, was in the primary home.
By the numbers: Between 2012 and 2022, the average house in a majority-Black neighborhood grew in value by $122,500, per Redfin. For houses in neighborhoods where most of the inhabitants are non-Hispanic whites, the increase over the same period was $230,000.
The big picture: The U.S. gained about $13 trillion in housing equity between February 2020 — just before the pandemic — and December 2022. Most of that increase was seen in the suburbs, as opposed to urban areas.
- While urban housing in aggregate increased by $1.98 trillion in the three years to December 2022, suburban housing spiked in value by $7.46 trillion — almost four times as much.
- That helps explain the way in which Black homeowners are accumulating housing wealth more slowly than their white counterparts. 77% of majority-Black neighborhoods are in urban areas, compared with just 22% of neighborhoods where most owners are non-Hispanic whites.
Between the lines: It's easy for those of us in big coastal cities to miss the broad facts of American housing. Urban homes in New York or Los Angeles are generally ludicrously expensive. Which helps explain why the average home in a majority-Asian neighborhood is $978,000 — most of those neighborhoods are in California. But such places aren't representative of city homes broadly.
The bottom line: America's suburbs — which are significantly whiter than America as a whole — are not only home to most of America's housing wealth, but have also driven most of its recent rise.
Go deeper: Check out Axios' Deep Dive on race and housing in America, and how home values and homeownership are a function of structural racism both past and present.
