Mar 21, 2023 - News

Raleigh's Black homeownership rate got a bump during the pandemic

Metro areas with the greatest increase in Black home ownership rates, 2019 to 2021
Data: Zillow; Chart: Axios Visuals

The rate of Black homeownership in Raleigh increased by nearly 4 percentage points during the pandemic, according to a new data analysis from Zillow and the Home Mortgage Disclosure Act.

Driving the news: Despite that, the Black homeownership rate remains about 29% less than white households in 2021, according to Zillow.

  • Zillow's analysis looked at the 50 largest metro areas, so numbers for Durham were not available. Charlotte's Black homeownership rate increased 1.5 percentage points over the same time period.

Why it matters: The increase could be "an early sign" that programs designed to make homeownership more accessible like down payment assistance are "starting to make a mark," Nicole Bachaud, a senior economist at Zillow, told Axios' Emma Hurt.

  • Raleigh has also been a hot landing spot for Black millennials that have moved away from their birth cities, Axios reported last year.

Yes, but: The rate remains below pre-Great Recession levels, she pointed out, and well behind that of white homeownership.

Homes owned by Black Raleighites also appreciated in value faster than white-owned homes. But Bachaud noted that phenomenon likely reflects the fact that Black home values are lower than average, and lower-priced homes have been in high demand.

  • The average Black-owned home in Raleigh is worth about $59,000 less than the overall average, according to Zillow.

What they're saying: Erika Brandt, the housing programs administrator for Raleigh, said the city has created several programs to encourage homeownership for lower-income residents because of the financial benefits it can bring.

  • "Homeownership is one of the drivers of accumulating generational wealth to pass on through families," she said. "It's huge for first time homebuyers to have equity that will continue to grow most likely throughout their lifetime."
  • City programs can be important to address this, she said, because Black residents "have been historically sidelined" from getting loans and financing.
  • Over the past three years, around 65% of people using the city's homebuyer assistance program are Black, she noted.

What we're watching: Rising interest rates have quickly made home ownership more expensive in the past six months. That is likely to put a strain on many lower-earning buyers and could potentially impede homeownership growth.

  • Brandt said that interest in the city's homebuying program has dropped significantly in recent months, as rates have increased.
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