The time is now.
A recent study found that between now and the year 2040, the number of new homeowners is expected to increase by 6.9 million — and that growth is predicted to be entirely among households of color. [1]
This is an exciting prospect for historically underserved people who have, for decades, faced barriers to homeownership. Minority groups are a rising force in the housing market, and the housing industry has an opportunity and responsibility to shift our focus to this emerging cohort.
By working to support minority homeownership in your community, you can take part in driving positive change while expanding your customer base.
The Need for Change
Owning a home is the primary way Americans build generational wealth, but historically, minority groups and people of color have been excluded from the wealth-building power of homeownership. This is evidenced by the severe homeownership gap that exists to this day.
Today, the average homeownership rate in the U.S. is 65%. [2] Among white households, that figure climbs to 74%, which is significantly higher than all other racial and ethnic groups. The Black homeownership rate is the lowest at 45%, followed by Hispanic homeowners at 49%. Asian Americans also lag behind the national average, with a homeownership rate of 59%.
Homeownership Rate [3]
By Race (2010-2020)
But the gaps extend beyond race and ethnicity. Among the LGBTQ+ community, the homeownership rate sits at 49%.[4] And while homeownership among women has risen to 61%, women still lag their male counterparts, who have a homeownership rate of 67%.[5]
Barriers and Opportunities
What's Driving Homeownership Disparities?
The reasons for these homeownership inequalities are multifold. A history of housing discrimination, unfair business practices, and a lack of affordable housing are just some of the issues we still face today. For marginalized groups, this has resulted in a wealth gap that has persisted for generations.
For example, when parents own a home, their children are more likely to become homeowners, and the reverse is also true — children who grow up in a family without a history of homeownership are less likely to buy homes themselves. That’s why many minorities and people of color are likely to be first-generation homebuyers. Expanding down payment assistance is one way we can break the cycle and help more first-generation buyers achieve homeownership. But what else can we do?
Be the Change
A collective effort is needed throughout the housing industry to break down barriers and promote a future of homeownership equity and opportunity. While systemic change is needed, real change starts with each of us. Home builders, real estate agents, mortgage lenders, and other industry professionals have the power to make a lasting difference.
Start by reflecting on the perceptions and practices that drive inequity in your part of the business. What are you doing to combat them? Also, consider your presence and involvement with minority groups. How can you improve? Can you make a concerted effort to meet and connect with leaders and members of Black, Hispanic, Asian, LGBTQ+, and other underserved communities?
Most importantly, commit to taking action. Here are some areas of focus to consider:
The homebuyers of tomorrow are increasingly diverse, and now is the time to tap into this underserved market. Expanding access to homeownership not only creates opportunities for those who need it most, it also provides an opportunity for your business to grow.
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