U.S. homeownership gap across racial groups widened in 2021

The difference in homeownership rates among white and Black Americans stretched to its widest margin in a decade in 2021 even as the overall homeownership rate grew, according to new data from the National Association of Realtors.

The homeownership rate in the U.S. increased to 65.5% in 2021, which was up from 64.7% in 2011. The rate has increased each year since 2015, when it reached its low point in the decade of 63.2%.

But as a greater share of Americans became owners, the gap in the homeownership rate between white Americans and minority groups has persisted. Among white Americans the homeownership rate was 72.7%, while the rate was 44% for Black Americans, representing the greatest difference in at least the past 10 years.

The National Association of Realtors attributed the gap at the national level to higher rates of first-time homebuyers among Black households, lower household incomes and higher mortgage denial rates.

“Black buyers are more likely to be first-time buyers, who are more sensitive to changes in mortgage interest rates, while white buyers are more likely to have housing equity to rely on as they make a housing trade,” Jessica Lautz, NAR’s deputy chief economist and vice president of research, said in a statement.

The report included state-level data that showed disparities in the rates of homeownership between white New Yorkers and minority New Yorkers are wider than in the rest of the country.

Newsday conducted its own analysis of local homeownership rates using U.S. Census data. It showed the homeownership rate across Long Island was well above the rest of the country, at 83.4%. The data show gaps in homeownership, particularly between white Long Islanders and Black and Hispanic Long Islanders, but the differences are narrower than in the country and state as a whole. Still, about three-quarters of households that own homes on Long Island are white. 

In Nassau County, 87.9% of non-Hispanic white households, 87.9% of Asian American households, 76.4% of Black households and 66.1% of Hispanic households own their homes.

In Suffolk County,  85.2% of non-Hispanic white households, 80.1% of Asian American households, 70.9% of Black households and 75.2% of Hispanic households own their homes.  

The data illustrate disparities in homeownership that local organizations have been working to address for a long time, said Gwen O’Shea, president and CEO of Community Development Corp. of Long Island, which provides first-time homebuyer education and down payment assistance programs. She noted Long Island's abundance of single-family housing compared with rental units as influencing the local rates. 

“In particular in a region like Long Island, we know that homeownership is the main way to create wealth for middle-income [people].”

In November, the U.S. Department of the Treasury attributed the longstanding homeownership gap to factors including the history of the Federal Housing Administration rarely insuring homes in low-income, Black neighborhoods in the 1930s as well as “past and current discrimination in the private mortgage market.”

O'Shea noted that policies, such as the FHA’s past housing discrimination, are still being felt locally.

“While that type of denial of homeownership and discrimination is no longer legal, it still very much permeates the homeownership space today," she said.   

Newsday found evidence of widespread disparate treatment of white and minority potential homebuyers in 2019 as part of its Long Island Divided series. It also chronicled the history of housing discrimination on Long Island, including restrictive covenants tied to homes built by Levitt and Sons in the 1940s that said the homes could not “be used or occupied by any person other than members of the Caucasian race.”

Laura Harding, executive director of the Syosset-based nonprofit ERASE Racism, said the NAR report highlights the impact of structural racism — even after the U.S. passed the Fair Housing Act of 1968.

Harding said the report shows "how the foundation in the way neighborhoods were created using exclusionary zoning, racial covenants in deeds and redlining in loans can have a longstanding impact that cannot be undone in one or two generations.” 

By Jonathan LaMantia

jonathan.lamantia@newsday.com@jonlamantia

Jonathan LaMantia covers residential real estate and other business news on Long Island. He previously covered the business of health care for Crain's New York Business.