Black Americans face greater financial and generational barriers when it comes to homeownership, according to a survey featured in the new Redfin report.
Amongst the key findings are that Black homeowners are more likely to make financial sacrifices when buying a house. Approximately, 23% of white homeowners made no financial sacrifices to buy their first home, versus 14% of Black homeowners. Also, 21% of Black homeowners earned $150,000 or more when they bought their first home, versus 11% of white homeowners, suggesting Black Americans must earn more than their white counterparts to become homeowners.
The homebuying process is “absolutely different for a person of color,” said Thomas Loving, a cybersecurity professional and Black homeowner. “It's not an easy journey. I really struggled trying to get an offer accepted on a house when I arrived in Houston. 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.”
Nearly 30% of Black respondents in the survey stated they took an extra job to afford their first home versus 22% of white respondents. Yet, 58% of white homeowners made less than $50,000 when they bought their first home versus just 34% of Black homeowners. The survey was fielded during the first week of June, and there were more than 1,500 respondents with 238 Black homeowners and 499 white homeowners.
These findings suggest the financial standard for becoming a homeowner is much higher for Black Americans than it is for whites. Nationwide, 16% of Black Americans who apply for mortgages are rejected, compared with 7% of white Americans. Black homebuyers are more frequently turned down due to debt and credit scores than their white counterparts.
Bryan Greene, vice president of policy advocacy for the National Association of Realtors, said "Black people who succeed in buying a home have to be Superman or Superwoman. 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."
For more information on the Black homebuying experience and the ways Redfin addresses inequalities in the market, check out the recap of Redfin’s recent symposium on the topic.
