Homeownership is one of the most well-known and effective ways Black families can build intergenerational wealth. Unfortunately, like most industries, housing equity is not shared and distributed evenly. For many, the dream never seemed attainable — due to exacerbating levels of inequality and systemic racism, such as student loan debt — but a new group has emerged showing that that dream is in fact, a reality.
An analysis from the National Association of Homeowners released back in November showed African Americans made up 5 percent of Americans who purchased homes in the first three quarters of the year, which was a single percentage point over 2019. US Census data also shows this cohort raised the home ownership rate for all Black Americans by more than two percentage points over the same time frame.
The fact that Black home purchases are much higher now compared to before the pandemic is quite a surprise,” National Association of Realtors economist Lawrence Yun told CNN Business. While Black folks are still navigating through long-standing disadvantages impacting their ability to purchase a home, millennials ages 26-39 made up a majority of Black home purchases, and many left apartments in cities and moved to homes in suburbs.
“Without a doubt, African-American millennials are participating in this home-buying surge,” says Yun. He went on to say that Black millennial home buying is another example of the summer and fall’s K-shaped economic recovery. Many people who were doing relatively well before the pandemic and managed to keep their jobs are thriving. Some even deposited their federal stimulus payments into savings accounts.
The added income and reduced personal spending has allowed wealthy and middle-class Black millennials to take advantage of record-low mortgage rates in markets where available homes have been relatively scarce.
The homeownership rate for Blacks—while rising—still remains well below whites, Asians, and Hispanics, according to Census Bureau data. As of third quarter 2020, the homeownership rate was 46.4% for Blacks compared to 67.4% for Whites.“Disproportionately high rates of home loan application denials for Black and Hispanic applicants are a key factor contributing to the homeownership gap,” according to a recent report from Morgan Stanley. Sixteen percent of Black households and 12% of Hispanics were refused a mortgage in 2019 compared to 8% of white households.
Reposted from: https://www.essence.com/news/money-career/black-millennials-major-contributors-home-buying-surge/