Black Americans face greater financial and generational barriers to homeownership than white Americans, according to a recent Redfin survey. The survey found 23 percent of white homeowners made no financial sacrifices to buy their first home, compared with 14 percent of Black homeowners.
Thomas Loving, a cybersecurity professional who spoke at Redfin’s recent “Homebuying: The Black Experience” symposium, said the homebuying process is “absolutely different for a person of color.”
“It’s not an easy journey. I really struggled trying to get an offer accepted on a house when I arrived in Houston,” Loving said. “I earn more than $400,000 a year, even without taking my spouse’s income into account, and I was in a position where I had to jump through hoops to prove that I could afford even a starter home. It was outrageous. Black homebuyers are the exception, not the standard, and people often assume we can’t afford to buy a home even when we have successful careers and earn high incomes.”
The survey also found that 21 percent of Black homeowners earned $150,000 or more when they bought their first home, versus only 11 percent of white homeowners, suggesting Black homeowners need to earn more money than their white counterparts. Also, 30 percent of Black respondents took an extra job to afford their first home, compared with 22 percent of white respondents.
White homeowners are more likely than Black homeowners to have parents and grandparents who are homeowners, according to the survey, which means they’re more likely to benefit from generational wealth when buying a home.
These findings suggest the financial standard for becoming a homeowner is higher for Black Americans, according to Redfin, which it says is one reason for the substantial homeownership gap between the races: 73.8 percent of white Americans owned their home in the first quarter of 2021, versus just 45.1 percent of Black Americans.
“Homeownership is closely tied to the American ideal of freedom, and specifically financial freedom,” Redfin Chief Economist Daryl Fairweather said in a release. “The fact that Black buyers report earning more money and making more financial sacrifices to enter the homeowner class is one example of how difficult it is for Black people in this country to achieve the American dream.”
A recent Redfin analysis of mortgage denials found 16 percent of Black Americans who apply for mortgages are rejected, compared with 7 percent 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,” Bryan Greene, vice president of policy advocacy for the National Association of Realtors, said at Redfin’s symposium. “They need to have higher degrees, they have more debt, they face persistent rejection and generally carry around bigger burdens to achieve the same goal as white people.”