While the COVID-19 pandemic struck all Americans, Black men and women took the biggest hit, suffering greater levels of unemployment, poverty, food insecurity and even death from the virus than other races. But while all this was happening, something interesting and unexpected took place as well — homeownership for Blacks, particularly young millennials increased significantly, representing the bulk of new homes purchased overall in 2020.
According to Bre’Anna Grant of Insider, “Black adults between the ages of 26 and 39 sparked a nationwide rise in the homeownership rate for African Americans.” According to a November 2020 report by the National Association of Realtors, “5% of home buyers during the first three quarters of 2020 were Black, compared to 4% in 2019.”
Grant reported that, while homeownership increased by 1% across the board for people of all races, “U.S. Census data shows Black millennials raised the homeownership rate for African Americans more than two percentage points over the same time frame.”
Experts attribute the increase in homeownership to a number of factors: desire to leave major cities where renting is more common; historically low-interest rates; fewer expenses because of life under quarantine; plus a recent “surge” in buying power for millennials of all races compared to older generations.
“This new surge or uptick in the homeownership rate is really about the buying power of millennials and the consciousness that, ‘hey, in order for me to really have a stake in my community and in my country, I need to own,’ and I do think that millennials really understand this idea,” Andre Perry, a fellow at the Brookings Institution told Deena Zaru from ABC News.
Of course, while homeownership is increasing, it’s not necessarily growing in a non-biased and non-discriminatory way. While homeownership among white Americans sits at 73% of the population, the rate for Black homeowners hovers at just over 43% — even with the recent gains made in 2020.
Even worse: “According to an MIT study released in October, Black people in the U.S. are likely to pay around $13,000 more on their mortgages due to a variety of factors including higher interest rates, less opportunity to refinance and higher property taxes,” Grant reported.
Many economists refer to this phenomenon as the “Black tax” or “segregation tax,” perpetuated by a systemic and unconscious bias against Black people. It also continually works to increase the disparity between white and Black Americans in housing and homeownership.
“Despite legislation and programs to bridge the homeownership gap, Black Americans still stagger behind their white counterparts,” Grant said. “They pay higher costs in mortgage interest payments, insurance premiums and property taxes. Also, Black-owned homes are appraised at lower values. Also, lower incomes and higher rates of poverty, combined with difficulties in getting mortgage approval mean that homeownership rates for Black Americans remain low.”
Experts agree that while increased homeownership among Blacks is positive, it also shows just how far we still have to go as a country for greater equality and inclusion.