A new commentary and research piece by Jacob Channel, LendingTree’s Senior Economist, hits on the topic of racial inequities in homeownership—particularly the share of homes owned by Black identifying Americans compared to the share of Black people living in the same area.
Overall, the study found Black-identifying Americans own a disproportionately small share of homes in every major area studied by LendingTree using U.S. Census Bureau data.
The LendingTree report breaks its data down to three major key findings:
First, in the top-50 metropolitan areas, Black people own a “disproportionately” small share of homes in relative to population size. On average, Black people make up 14.88% of the population across these top-50 cities, but their homeownership rate comes in at 10.02% of owner-occupied homes across the same areas.
As a comparison, white people on average account for 58.21% of the population across the same areas and account for 70.51% of owner-occupied homes.
Second, Salt Lake City, Utah, has the smallest difference between the share of homes owned by Black people and the share of the city’s population that is black. In this city, 1.68% of the population identifies as black, while Black homeowners represent 0.57% of owned homes.
Third, Memphis, Tennessee had the biggest reported difference between the Black population and those that own their homes. In this city, Black-identifying people made up 46.70% of the population—the largest rate among the top-50 metro areas—but they only own 34.99% of housing in the area. This represents a disparity of 11.71 percentage points.
So what is driving these statistics? According to LendingTree, the most obvious factor based on Census data was median household income, which came in at $48,297 or nearly $30,000 less than the average $77,999 of household income for white households.
In addition, Black households were generally found to have less accumulated household wealth, experience higher-than-average mortgage application denial rates, and are more likely to be unbanked.
“That said, it’s important to note that while these examples can shed some light on why homeownership rates are relatively low for Black people, they’re not all the reasons why a person who identifies as Black may struggle to become a homeowner,” Channel said. “And, ultimately, various socioeconomic factors continue to drive this unfortunate trend.”
This survey focused solely on Black homeownership rates, and not all people of color. To view statistics for the top-50 metropolitan areas, click here.
