Housing News

Black Homeownership Rate Increases, But Homeownership Gap Persists

Despite the affordability challenges homebuyer face in today’s real estate market, more Black Americans are becoming homeowners.

The Black homeownership rate ticked up by a 0.6 percentage point in 2023, according to a recent National Association of Realtors (NAR) report. That brought the overall rate up to 44.7% that year.

“Despite higher mortgage rates, homeownership increased for most minority groups in 2023,” said Nadia Evangelou, a senior economist at NAR. “That’s due to strong wage growth and younger generations reaching homebuying age.” 

But while the Black homeownership rate climbed the most of any racial group in 2023, Black households continued to own the fewest percentage of homes, according to the NAR report. 

Less than half of all Black households were homeowners, compared to 72.4% of white households. Asian households had a 63.4% homeownership rate, while Hispanic households had a 51% homeownership rate.

“The gap between the white and the Black homeownership has increased. Black homeowners still lag behind other racial groups,” said Evangelou. “It’s hard to increase the homeownership rate enough to make up the difference.”

The percentage of Black homeowners did shoot up on a regional level, with three states boasting rates above 50% in 2023: Mississippi (58%), Delaware (56%), and South Carolina (56%). States with the lowest Black homeownership rates included North Dakota (10%), Montana (20%), and Maine (21%).

“Today’s first-time homebuyers continue to face housing affordability and credit-access challenges,” NAR Deputy Chief Economist Jessica Lautz said in a statement. “Buyers have always had to consider total home costs—including utilities, insurance, and commuting expenses—which are especially important when taking the initial steps into ownership.”

Indeed, the report notes that many complex financial components must align in order to buy a home, including intergenerational wealth, access to credit, and overall affordability.

For example, homeowners pay about 53% more a year for insurance than a decade ago. In 2013, they spent about $860 annually. That shot up to a median of $1,360 in 2023.

However, increased costs haven’t discouraged more Americans from becoming homeowners. In the last decade, the homeownership rate has ticked up from 63.5% in 2013 to 65.2% in 2023.

During that period, Hispanic Americans were the fastest-growing group of homeowners. An additional 3.5 million Hispanic Americans became homeowners from 2013 through 2023, according to NAR.