The pandemic housing boom appears to be making an impact on one longstanding area of racial disparity.
More of the nation’s real estate wealth is going to Black homeowners, according to the latest data from the Federal Reserve. As the chart below shows, 6% of the country’s real estate wealth was owned by Black people in the third quarter of 2021, the most for any quarter in records going back to 1989. While that’s still disproportionately small—since Black people make up 13.4% of the population—it’s a step in the right direction, economists say.
It wasn’t that Black homeowners have profited at the expense of others—total wealth for all groups combined rose 14.9% over the year. It’s just that Black property wealth grew faster, mushrooming 29% over the same time period, to $2.2 trillion. One possible reason for the trend: Black homeowners are seeing their home values appreciate faster than other groups, especially in cities where prices are rising quickly, a 2019 paper by researchers at Georgia State University found. That may be because of gentrification trends or because Black homeowners tended to buy at lower prices with more room to grow, the researchers suggested.
“These improvements in Black real estate wealth are worth celebrating, but there is still a long way to go to close the Black-white real estate wealth gap,” Daryl Fairweather, chief economist at real estate firm Redfin, wrote in a recent commentary.
The improvement in wealth came even though the Black homeownership rate—which was decimated by the Great Recession—is just 43.1%, well below the peak of 49.7% it reached in 2004. Credit score reform, repealing discriminatory zoning practices by local governments, and rising wages for Black workers could all serve to elevate Black homeownership wealth even further in the future, Fairweather said.
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