Homeownership Disparity: The Black-White Divide Reveals Persistent Housing Inequities

The persistent gap in homeownership rates between Black and white Americans highlights the enduring inequities embedded in the housing market.

While two-thirds of white millennials have purchased a home, only one-third of their black counterparts have achieved the same feat, according to a Redfin analysis. While it's the biggest gap of any generation, Black Americans are less likely to own their own homes than white Americans at any age.

White adults belonging to Gen Z are nearly twice as likely as their black counterparts within the same age group to own homes, with rates standing at 30% and 16%, respectively.

Although the racial gap in homeownership is less pronounced among older generations, it is significant. Just over half (51%) of Black Gen Xers are homeowners, compared with 80% of white people in the same generation.

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Baby boomers have the smallest disparity in percentage, but white boomers still maintain a significantly higher rate of homeownership — 60% of Black boomers own their homes, while 85% of white boomers do.

Redlining and discriminatory housing covenants prevalent in the early to mid-1900s have resulted in generations of Black families being deprived of property ownership opportunities and the value appreciation that comes with it.

Black Americans still encounter obstacles in buying real estate today. Their mortgage applications are twice as likely to be rejected compared to their white counterparts, and the mortgage rates they secure when they purchase a home often are higher.

"Millennials have consistently tracked behind their parents' generation when it comes to homeownership because they've faced significant financial obstacles and a historic inventory shortage," Redfin Chief Economist Daryl Fairweather said. "But that number doesn't tell the whole story: Black millennials have borne the brunt of those challenges because they're at an unfair financial disadvantage due to the country's history of racial discrimination. Young Black Americans started out behind largely because they're less likely to have property and money passed down from their parents or grandparents, who faced racial discrimination themselves, and they have stayed behind because they're still facing discrimination and unfair economic circumstances."

The homeownership rate among Black millennials and Gen Xers has grown over the past few years. But the racial gap remains because homeownership among white millennials and Gen Xers has increased at a comparable rate.

"Although young Black Americans face outsized barriers to homeownership I expect the racial homeownership gap to start narrowing for millennials and Gen Zers in the near future," Fairweather said. "The Black unemployment rate is at an all-time low, and the racial wage gap is shrinking, which should help more young Black Americans get their feet in the homeownership door."

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