A new report by USA Today [1], with information by Redfin, revealed that median-income African-American households could afford just 25% of the homes on the market last year—a decline from 39% in 2012.
The median-income white households could afford 57% of homes for sale in 2018, which is also a decline from 69% seven years ago.
“African Americans who haven’t been able to buy a home since the recovery began have only seen prices rise further and further out of budget,” says Daryl Fairweather, Redfin's Chief Economist.
Home prices in 46 of the larger markets increased 70% since 2012. Redfin data also shows that builders are building more expensive houses to offset rising land, labor, and material costs.
Las Vegas, Nevada, saw the largest decline in affordability for the average African-American household, with just 14.7% of home affordable last year. This is a steep decline from 61.2% in 2012.
Other markets that saw large drops were: Orlando, Florida; Riverside, California; and Phoenix, Arizona. All markets listed saw affordability fall by at least 30%.
The California cities of San Jose, San Francisco, San Diego, and Los Angeles are the most financially out of reach, as Afrian-Americans could afford must 0.3% to 1.3% of homes on the market.
USA Today also reports that the share of African-American homeowners fell from 43.8% in early 2012 to 40.6% in Q2 2018, according to the U.S. Census Bureau. During the same period, white homeownership fell from 73.5% to 73.1%.
The National Association of Home Builders (NAHB), [2] with information from the U.S. Census Bureau’s Housing Vacancies and Homeownership Survey, revealed in September [3]that the minority homeownership rate fell to 46.9% in Q2 2019.
The rate fell year-over-year from 47.4% and is at its lowest level since Q3 2017.
According to the U.S. Census Bureau’s Housing Vacancies and Homeownership Survey [4], the overall homeownership rate for the quarter fell to 64.1% from 64.3% in Q2 2018.
The NAHB stated that the recent drop in homeownership indicates that “eroding housing affordability” continues to be a barrier for prospective buyers.