Black millennials between the ages of 26 and 39 are increasingly becoming homeowners during the pandemic. They’re buying homes at higher rates than other Black Americans and previous generations. Their higher rates in real estate have led to an overall increase in the homeownership rate for African Americans, according to an article at BlackEnterprise.com. This is “the path to a middle-class lifestyle and wealth,” Lawrence Yun, chief economist of the National Association of REALTORS®, told Insider.
During the second quarter of 2020, the homeownership rate for Black Americans increased to 47%, up from 44% in the first quarter. Millennials were behind most of that uptick, researchers note.
But even with the uptick in home buying among African Americans, a wealth disparity and discrimination continue to press on this next generation of home buyers. Rising home prices and housing shortages are not helping. “It’s going to be a challenge for all millennials, but mostly for Black millennials because of wealth disparity and discrimination,” Yun says.
“A radical increase in Black homeownership is needed to see progress in bridging Black and white homeownership and white inequality,” according to the National Community Reinvestment Coalition. The organization found a homeownership rate gap between 20% and 30% has lingered between Black and white people for more than a century. “One of the defining factors of economic well-being for individuals and families is household net worth or wealth, but not all families are equal,” the report notes. The report continues that a 60% Black homeownership rate is needed to address “significant barriers to housing access and wealth creation” for the African American community.
However, several housing reports released over the past year show challenges that the Black community faces in their path toward greater homeownership. An MIT study in October revealed that Black Americans are likely to pay around $13,000 more on their mortgages due to factors such as being charged higher interest rates, having less opportunity to refinance, and living in areas with higher property taxes.