The rate of homeownership among Black households was 45.7% in 2023, down from its peak of 49% in 2004, according to a new report from the National Association of Real Estate Brokers (NAREB).
The 2024 State of Housing in Black America (SHIBA) report describes a difficult environment for Black homeownership in the U.S. The two best-performing demographics for African Americans – Black female-headed households and millennials – both declined in homeownership in 2023.
“The 2024 SHIBA report confirms that we are in a state of emergency with Black homeownership,” said NAREB President Courtney Johnson Rose. “The SHIBA report underscores that there has been little progress in increasing Black homeownership. The past two years have been tough, but even before 2021, Black homeownership was either falling or stagnant and remains far from its pre-2004 high of nearly 50%.”
Black households trying to buy a home in 2023 were confronted with a variety of barriers, including that Black applicants were denied mortgages at more than double the rate of White applicants. The denial rate for Black people seeking conventional loans is even higher. When they were approved, Black people were more likely to receive home loans that were more expensive than a similar White household.
In addition, homes in Black neighborhoods were less likely to be appraised at the same value as comparable homes in white neighborhoods. Even though the number of Black people in the labor force has continued to grow, these barriers have helped perpetuate the homeownership gap between Black and Whites.
One of the impacts of this housing gap is that many Black families are unable to build home equity, a major source of wealth in the U.S., which has played a significant role in the Black-White racial wealth gap. The Federal Reserve found that in the fourth quarter of 2023, the average net worth for White households was about $1.4 million, compared to $332,390 for Black households.
NAREB has developed a series of initiatives to help Black households become homeowners, including the NAREB Black Developers Academy, which seeks to increase Black participation in the real estate industry. There also is the Building Black Wealth Tour, which helps Black households prepare financially to become homeowners and learn how to apply for mortgages. Another NAREB initiative is working to end appraisal bias toward Black borrowers and homeowners.
“The 2024 NAREB SHIBA report demonstrates that we need all hands-on deck to increase Black homeownership,” said Johnson Rose. “This is a call to action. There must be a united, multi-sector response that involves public, private, and non-profit entities implementing practices, policies, and regulations that can finally reverse the trend and boost Black homeownership. We need innovative ideas and leadership that can bring about change. Black homeownership must increase if America is to have fair and equitable communities.”
