Affordability has plagued many homebuyers for a long time, but no group is challenged more than Blacks, according to a recent report from Redfin.
Redfin chief economist Daryl Fairweather said in prepared remarks that Black families have been hit especially hard "because they're often less wealthy, to begin with."
Black Americans have less generational wealth and lower credit scores (and sometimes no credit scores at all) compared to white Americans.
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"That makes it tougher to afford a down payment and qualify for a low mortgage rate," Fairweather said. "They also frequently face racial bias during the home buying process."
Blacks Can Afford Only 9% of Homes
Redfin research found that only 9% of homes for sale last year were affordable for the typical Black household, compared with 28% for the typical white household. Blacks represented the lowest share of any race in this analysis.
Comparatively, Hispanic/Latino households had 14% of homes that were considered affordable. Asian households, meanwhile, had 34%.
Detroit was the top market for affordability for Blacks, but that was still less than half the share affordable for the typical white household (70%).
In Los Angeles, close to zero (0.1%) listings were affordable for the typical Black household.
Redfin Deputy chief economist Taylor Marr said in prepared remarks that housing affordability is at the lowest level in history, which will widen the wealth gap—especially between millennials.
"The good news is that housing affordability [overall] should improve. Mortgage rates will eventually come down as the Fed makes progress fighting inflation, and home prices have already begun falling. Incomes are also growing faster than the historical norm."
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