Redfin's homeownership and race survey, fielded during the first week of June, had more than 1,500 respondents: 238 of the respondents identified themselves as Black, and 499 identified themselves as white.
Here are the key takeaways:
- 23% of white homeowners made no financial sacrifices to buy their first home, versus 14% of Black homeowners.
- 21% of Black homeowners earned
$150,000or more when they bought their first home, versus 11% of white homeowners. That suggests Black Americans need to earn more money than their white counterparts to become homeowners.
- White homeowners are more likely than Black homeowners to have parents and grandparents who are homeowners, which means they're more likely to benefit from generational wealth when they're purchasing a home.
"It's not an easy journey. I really struggled trying to get an offer accepted on a house when I arrived in
Black homeowners more likely to make financial sacrifices, earn high incomes to buy their first home
Twenty-three percent of white homeowners made no financial sacrifices to buy their first home, versus 14% of Black homeowners. Meanwhile, 30% of Black respondents took an extra job to afford their first home, versus 22% of white respondents.
Twenty-one percent of Black homeowners earned
These findings suggest the financial standard for becoming a homeowner is higher for Black people than white people, making it more difficult for Black Americans to buy homes. That's one reason for the substantial homeownership gap between the two groups, with 73.8% of white Americans owning their home in the first quarter of 2021 versus just 45.1% of Black Americans.
"Homeownership is closely tied to the American ideal of freedom, and specifically financial freedom," said Redfin Chief Economist
A recent Redfin analysis of mortgage denials supports the idea that there are higher financial hurdles for Black Americans to buy homes: Nationwide, 16% of Black Americans who apply for mortgages are rejected, compared with 7% of white Americans. Black homebuyers are more frequently turned down due to debt and credit scores than their white counterparts.
"Black people who succeed in buying a home have to be Superman or Superwoman," said
Black homeowners less likely to have parents who are homeowners
Seventy-four percent of Black respondents to the survey have parents who are homeowners, versus 84% of white respondents. And 67% of Black respondents have grandparents who are homeowners, versus 72% of white respondents.
Note that all respondents to Redfin's survey are homeowners, so the likelihood of having parents and grandparents who are also homeowners is higher than it is for the general population for both races.
Redlining, the racist housing policy that effectively blocked many Black families from obtaining mortgages throughout the middle of the 20th century, is one reason Black homeowners are less likely to have parents and grandparents who are also homeowners. It's also a significant factor in the comparatively low Black homeownership rate.
For more on the Black homebuying experience and ways Redfin can help address inequalities in the housing market, here's a recap of Redfin's recent symposium on the topic: https://www.redfin.com/news/redfin-event-black-homebuying-experience/
To view this full report, including charts and methodology, please visit: https://www.redfin.com/news/redfin-survey-black-homeownership-financial-barriers/
Redfin (www.redfin.com) is a technology-powered real estate broker, instant home-buyer (iBuyer), lender, title insurer, and renovations company. We sell homes for more money and charge half the fee. We also run the country's #1 real-estate brokerage site. Our home-buying customers see homes first with on-demand tours, and our lending and title services help them close quickly. Customers selling a home can take an instant cash offer from Redfin or have our renovations crew fix up their home to sell for top dollar. Since launching in 2006, we've saved customers more than
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Redfin Journalist Services: Isabelle Novak, (414) 861-5861, firstname.lastname@example.org