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The Growing Divide Between African-American, White Homeownership

A report from the Urban Institute delved into the data between the nations demographics in the realm of homeownership. Specifically, the report focuses on the divide between African-American and white homeowners in the United States today. 

The report begins by pointing to the Great Recession era, then describes the ever-increasing gap that has, on average, developed between African-American and white homeownership since that time, to what is now at its 50-year apex. The exact data reveals the gap between the two categories widening overall from 28.1% in 2010 to 30.1% in 2017.

This increase did not occur in similar fashions and percentage points across the board regarding different states and regions. When 105 of the nations metropolitan statistical areas (MSAs) that had more than 40,000 black residents living within them were broken down and analyzed individually, the area surrounding Minneapolis posted an African-American-white homeownership gap of 51%, while on the other hand, the area surrounding Charleston, South Carolina, narrowed the gap to just 15%.

The blog then explores the determining factors that caused this gap across the MSAs, which explored top criteria such as sex, employment, and age, along with the areas housing supply, housing affordability, and racial segregation. Income, marital rate, and credit scores were also pinpointed as the three main facets that were indicative of why the gap in proportions was so great. Beyond that analysis, 17% of the homeownership gap across these MSAs remains a conundrum to the experts, unable to be explained by any tangible data or clear cut variables.

Further breaking down this analysis brings even more enlightenment about this divide, with the data showing a 31% of the gap attributed to income differences between African-American and white households. Specifically, the average income for a black household is currently $38,183, a number markedly less than the current white households average income of $61,363. Differences in marital status allotted for 27% of the gap, with African-American households being far less likely to marry than white counterparts. 

Regarding credit score differences, 22% of the gap was given to this category as data revealed half of the white households have a FICO credit score above 700, rivaling African-American households' 21%. 

The blog then calls for policymakers to strive for solutions while offering practical guidance and advice, as well as pointing out what is currently being done in federal, state, and local levels to address this issue.

On the heels of this report, the National Association of Realtors revealed that minority homeownership rates continue to trail the national average. Even though the nation has experienced a homeownership rate boom overall, with the United States’ homeownership rate rising from roughly 62% to 65%. When broken down by demographics, the statistics for homeownership in the minority communities show a glaring gap. These two studies point to a pressing need to narrow this divide, as well as dive deeper into what is causing them, as well as providing several possible remedies.

About Author: Andy Beth Miller

Andy Beth Miller is an experienced freelance editor and writer. Her main focus is travel writing, and when she is not typing away from her computer at her home in the Hawaiian Islands, she is regularly roaming the world as a digital nomad, and loving every minute of it. She has been published in myriad online and print magazines, is a fan of all things outdoors, and finds life (and all of its business, technological, and cultural facets) fascinating in their constant evolution. She is excited to spectate as the world changes, and have a job that allows her to bring a detailed account of those constant shifts to her readers at home and abroad.
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