Data from the U.S. Census Bureau’s quarterly Residential Vacancies and Homeownership Survey revealed that the nation’s minority homeownership rate increased to 48.6% in fourth-quarter 2019.
That’s up 0.8 percentage points from fourth-quarter 2018 and the highest figure since third-quarter 2011, when the rate reached 48.9%. The National Association of Home Builders’ (NAHB) Eye on Housing blog noted that last year’s annual increase in the minority homeownership rate is higher than that of the country’s overall homeownership rate, which jumped by 0.3 percentage points. Notably, however, the overall gain brought the U.S. homeownership rate to 65.1%, its highest level since 2013.
Both the Hispanic and African American homeownership rates grew substantially on an annual basis during the final quarter of 2019. Hispanic homeownership saw the highest growth rate among all demographics during the quarter, rising from 46.9% in fourth-quarter 2018 to 48.1% a year later, a jump of 1.2 percentage points. The 48.1% homeownership rate represents a two-year high for Hispanic households.
The homeownership rate for African Americans, meanwhile, rose 1.1 percentage points year over year, from 42.9% in fourth-quarter 2018 to 44% in fourth-quarter 2019. That is the highest level since 2012 and a jump of 3.4 percentage points over the previous six months — a stunning rebound considering that the figure fell to 40.6% in second-quarter 2019, the lowest share for African American households since 1950.
Although the turnaround is certainly encouraging, Urban Institute researchers Sarah Strochak, Laurie Goodman and Sheryl Pardo cautioned that determining and understanding homeownership rates can be a complex endeavor.
“We’ve been talking about the crisis in black homeownership for some time, so an 8% increase [equating to 3.4 percentage points over six months] seems like great news,” the trio wrote on the Urban Wire blog. But they also noted that the census bureau’s homeownership rates come from a sample size of about 72,000 households, with a margin of error at the 90% confidence level. Readings taken during the fourth quarter of the year, the Urban Institute added, also tend to be higher because of seasonal fluctuations.
“Even if the 44% [rate] were [100% accurate], an enormous gap of 29.7 points remains between the black and white homeownership rates, a gap larger than the 1960 gap, before the Fair Housing Act was passed,” the Urban Institute continued. “Much work still needs to be done.”
Donnell Williams, president of the National Association of Real Estate Brokers (NAREB), referenced that gulf in a statement last week while expressing “guarded optimism” about the upward trend of black homeownership.
“While we remain positive about the upward trend, NAREB is mindful that a nearly 30 percentage-point gap separates the current non-Hispanic white homeownership of 73.7% from the black homeownership rate of 44%,” Williams said.
“Brisk seasonal sales could account for the increased black homeownership rate. However, these back-to-back quarterly increases into the fourth quarter indicate to us that black Americans are purchasing homes at a higher, more consistent rate.”
NAHB economist Carmel Ford also noted that ongoing favorable conditions in the U.S. economy and housing market are likely helping drive minority homeownership shares upward.
“Mortgage rates are still relatively low, and a healthy job market has helped to make homeownership more affordable,” Ford said. “In fact, housing affordability was at a three-year high in the third quarter of 2019, according to the National Association of Home Builders’ Housing Opportunity Index. These factors are most likely contributing to the recent upticks in the overall and minority homeownership rates.”
