Monday, May 16, 2022

Black homebuyers underrepresented in the US real estate boom

The COVID-19 pandemic has changed the nature of home buying in the United States, but one constant is that black Americans do not have equal access to their home.

A National Association of Realtors (NAR) report released on Thursday said black buyers made up just six percent of total home buyers this year – a figure that has changed little over the past two decades.

The dynamism of the pandemic has allowed many Americans to get stuck in student loans and build up savings, as opportunities such as travel and eating out at restaurants were out of bounds for spending.

As remote working became the norm, more shoppers packed up and moved closer to family and friends rather than relocating for jobs, according to NAR’s 2021 Profile of Home Buyers and Sellers.

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However, black Americans are substantially depleted of student loan debt compared to their white counterparts, and are less able to obtain help from family, the report said.

“Unfortunately, the race hasn’t really changed much this year. We’re still seeing a fairly consistent, low share of minority home buyers,” NAR’s Jessica Lutz told AFP in an interview.

While lower interest rates made mortgages more accessible, a chronic lack of homes for sale drove prices higher and kept many first-time buyers off the market, the data showed.

This graph from the National Association of Realtors shows home ownership rates by race between 2009 and 2019. (Courtesy National Association of Realtors)

Even in the South, blacks made up just nine percent of homebuyers in an area where their population is more than double the national average of 13 percent in some states, the report said.

Prior NAR research shows that white homeownership rates are 30 percentage points higher than black buyers, more than twice as likely to have student loan debt and higher amounts, and more than twice as likely as white applicants to mortgage rates. has been rejected for.

And because they are less likely to own homes, they may not be able to use the proceeds from the sale of the home to finance the purchase.

price out

While the share of first-time buyers rose this year, it remains below the historical benchmark of 40 percent, said Lutz, NAR’s vice president of demographics and behavioral insights.

“We know that first-time home buyers are struggling to enter this housing market,” she said, adding that they find it difficult “to be able to pull money together and then compete with other buyers.” , which can make fast all cash payments.

With historically low inventory – with labor shortages and supply issues and builders tending to focus on large, expensive homes – sellers are getting full price more for their homes, and a pool of buyers Large part can be paid in cash.

According to the report, the median home price was $305,000, which is $30,000 more than in 2020.

President Joe Biden has made lowering home prices a point of his Build Back Better bill under consideration in Congress, calling for $150 billion for “the largest and most comprehensive investment in affordable housing in history.”

His plan will offer down payment assistance to help more buyers build their first home and build wealth, and will focus on zoning improvements to allow for more construction.

This map from the National Association of Realtors shows the percentage of African Americans who owned their own home in each US state in 2019.  (Courtesy National Association of Realtors)

This map from the National Association of Realtors shows the percentage of African Americans who owned their own home in each US state in 2019. (Courtesy National Association of Realtors)

close to family

One of the biggest shifts during the pandemic has resulted in a surge in demand for work-from-home opportunities as offices are closed.

“Home sellers are saying that their number-one reason to sell is to get closer to friends and family,” Lutz said. “People really wanted their support system around them and needed it during the pandemic.”

Reasons for relocating Job transfers fell from 11 percent to seven percent.

She said she expects that trend to continue “as CEOs understand that if they want to retain talent, they may need to allow more flexibility in working from home.”

Another trend is the declining share of homebuyers with children, which fell to 31 percent — the lowest on record, she said.

This shifts priorities, as those buyers will be less concerned about issues such as schools or larger homes, to cash-strapped buyers “opening up neighborhoods for them that would have been off limits when they had kids in the house.”

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This article is republished from – Voa News – Read the – original article.

Nation World News Desk
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