Homes owned by Black families appreciated the fastest during the pandemic

Rhea-AI Summary

A new analysis by Zillow reveals significant progress in Black Americans' housing wealth, with the value gap between typical Black-owned homes and the overall U.S. home value narrowing to its smallest in over two decades. As of January 2023, the typical Black-owned home is valued at 14.8% less than the average U.S. home, compared to a 17.3% gap in February 2020. Black homeowners have gained approximately $84,000 in equity since the pandemic began, with home values appreciating by 42.5%. Despite these gains, barriers to homeownership persist, particularly in markets with high appreciation rates where mortgage denial rates are disproportionately affecting Black applicants.

Positive

• Black-owned home values increased by 42.5% from February 2020 to January 2023.
• The typical Black homeowner gained nearly $84,000 in equity since the start of the pandemic.
• The gap between the typical Black-owned home's value and the U.S. average has decreased to 14.8%, the smallest in 20 years.

Negative

• Barriers to accessing homeownership remain significant for Black Americans, particularly in high-appreciation markets.
• Mortgage denial rates for Black applicants are highest in markets where home values have appreciated the most.

Black Americans' housing wealth has made strides, but remains well below that of the typical U.S. household

• The gap between the value of the typical Black-owned home and the typical U.S. home is the smallest it's been in the past two decades.
• The typical Black-owned home is worth 14.8% less than the typical home overall.
• Among Black homeowners, Black women saw the largest recent increase in homeownership rates.

SEATTLE, Feb. 27, 2023 /PRNewswire/ -- Homes owned by Black families appreciated more than any others since the start of the pandemic, with the typical Black homeowner gaining nearly $84,000 in equity. Black Americans also made slight gains in homeownership rates, despite disproportionate job and income loss.

The gap between the typical Black-owned home's value and the value of the typical U.S. home is now the smallest it's been in more than two decades, according to a new analysis of data from Zillow and the Home Mortgage Disclosure Act.

"These gains are extremely important in terms of increasing wealth among the Black community, as homeowners of color are more likely to have the bulk of their household wealth tied up in their homes," said Nicole Bachaud, senior economist at Zillow. "Due to years of redlining and other forms of systemic discrimination, housing disparities between Black and white families persist. Policies and interventions like expanding access to credit, building more affordable homes and finding new approaches to mitigate appraisal bias are keys to achieving housing equity."

From February 2020 to January 2023,¹ Black homeowners saw their home values increase 42.5%, compared to 38.5% for U.S. home values overall, and 37.8% for white-owned home values. Hispanic- and Asian-owned home values increased by 38.3% and 37%, respectively.

Home value appreciation among Black homeowners has outpaced all other races since 2014, and that trend accelerated at the start of the pandemic, further shrinking the home value gap. In February 2020, the typical Black-owned home was worth 17.3% less than the typical home overall. By January 2023, that gap closed to 14.8%, which is the closest Black-owned home values have been to overall values since at least the year 2000.

Among the 50 largest metros in the country, that home value gap has shrunk the most in Detroit — by 9 percentage points — since February 2020. Kansas City, Chicago, Cleveland, Milwaukee and Louisville, among other markets, also saw large improvements, with the gap closing by more than 5 percentage points in that time.

Homeownership

In 2021, the latest available data from the U.S. Census Bureau, 44% of Black households owned their homes, compared with 73.3% of white households — a gap of more than 29 points.

According to the most recent U.S Census Bureau data, Black homeownership increased 2 percentage points from 2019 to 2021, compared to 1.3% for the nation at large. Black women ages 45–54 and 75 and older saw the largest increase among Black homeowners during the pandemic, with 2.9 percentage points of growth. Black men ages 35–44 saw a 2.5 percentage-point jump in homeownership rate over that period, the second-largest increase in the group.

Still, for many Black Americans, barriers to accessing homeownership abound. Many markets with the highest appreciation in Black home values also have the highest mortgage denial rates for Black applicants, meaning the markets where Black homeowners have the best chance of improving their household wealth and gaining equity with homeowners overall are markets where it's most difficult for Black mortgage applicants to actually become homeowners.

Pandemic-era Changes in Black Americans' Housing Wealth 

Metropolitan area*	Pandemic-era change in Black- owned home value vs. all homes' value (percentage points)	Typical Black-owned home value	Typical U.S. home value	Black home- ownership rate change, 2019–2021	Black home- ownership rate gap, relative to white households, as of 2021 (percentage points)
United States	-2.5	$280,925	$329,542	2.0 %	-29.3
Detroit, MI	-9	$138,574	$228,249	3.0 %	-34
Kansas City, MO	-8	$215,141	$276,889	3.3 %	-30.8
Chicago, IL	-6.9	$197,274	$289,469	2.5 %	-33.4
Cleveland, OH	-5.8	$131,011	$203,357	0.6 %	-38.3
Milwaukee, WI	-5.7	$193,825	$291,841	2.4 %	-41.5
Birmingham, AL	-5.6	$142,312	$236,630	6.8 %	-25.4
Buffalo, NY	-5.4	$143,705	$234,092	0.7 %	-37.5
Louisville–Jefferson County, KY	-5.2	$175,981	$238,520	2.8 %	-36.3
Oklahoma City, OK	-4.6	$178,587	$213,342	1.3 %	-33
Jacksonville, FL	-4.3	$286,527	$348,667	5.7 %	-24.1
Philadelphia, PA	-4.2	$251,014	$323,974	1.5 %	-26.2
Pittsburgh, PA	-4.2	$148,175	$194,489	6.2 %	-38
St. Louis, MO	-4.1	$144,377	$225,793	4.1 %	-35.8
Columbus, OH	-4.1	$229,721	$285,648	2.0 %	-37.6
Richmond, VA	-4	$310,539	$334,158	0.5 %	-26.4
Baltimore, MD	-3.5	$306,991	$352,931	0.4 %	-32.4
Memphis, TN	-3.3	$175,121	$226,846	1.8 %	-33
Indianapolis, IN	-3.2	$236,035	$257,620	1.0 %	-36.3
New York, NY	-2.7	$515,993	$574,074	2.1 %	-32.9
Atlanta, GA	-2.7	$312,955	$357,312	4.6 %	-25.3
Hartford, CT	-2	$251,188	$309,788	-0.1 %	-33.8
Tampa, FL	-1.9	$323,866	$360,578	1.4 %	-28.6
Cincinnati, OH	-1.9	$207,773	$252,129	2.3 %	-39.6
Houston, TX	-1.5	$252,508	$295,108	2.2 %	-31.8
Sacramento, CA	-1.3	$506,275	$538,042	0.2 %	-34.9
Charlotte, NC	-1.1	$305,422	$354,977	1.5 %	-30.4
Orlando, FL	-1.1	$334,894	$372,553	-0.5 %	-26.3
Raleigh, NC	-1.1	$358,981	$414,810	3.9 %	-28.9
Dallas–Fort Worth, TX	-1	$301,292	$359,743	1.2 %	-31.7
Providence, RI	-1	$385,681	$424,480	-2.1 %	-35.3
Boston, MA	-0.8	$506,924	$607,115	1.4 %	-33.4
San Antonio, TX	-0.8	$285,415	$287,206	3.8 %	-23.8
Virginia Beach, VA	-0.8	$299,921	$316,156	1.1 %	-31.1
Miami–Fort Lauderdale, FL	-0.7	$367,818	$442,044	3.0 %	-24.2
New Orleans, LA	-0.6	$202,036	$240,717	0.5 %	-27
Washington, DC	-0.5	$489,038	$521,347	0.9 %	-21.2
Phoenix, AZ	-0.5	$387,527	$429,775	5.4 %	-33.7
Austin, TX	-0.1	$390,391	$476,581	0.9 %	-24
San Jose, CA	0	$1,220,780	$1,358,777	-1.8 %	-38.5
Salt Lake City, UT	0	$513,061	$523,731	2.2 %	-47.3
Denver, CO	+0.1	$504,356	$568,272	-4.1 %	-29.8
Las Vegas, NV	+0.1	$383,782	$391,393	3.7 %	-33
Nashville, TN	+0.1	$368,530	$420,948	3.2 %	-29.2
Portland, OR	+0.5	$501,708	$523,272	1.4 %	-25.8
Los Angeles–Long Beach–Anaheim, CA	+0.6	$681,532	$841,462	-2.5 %	-25.1
Minneapolis–St. Paul, MN	-0.8	$303,390	$349,472	6.6 %	-45
Riverside, CA	+1.5	$529,626	$531,416	2.1 %	-26.3
Seattle, WA	+1.5	$573,551	$688,312	4.0 %	-33
San Diego, CA	+1.7	$652,147	$816,218	-0.3 %	-34
San Francisco, CA	+3.6	$826,439	$1,087,239	-0.9 %	-28.8

 

*Ranked by largest reduction in home value gap between Black-owned homes and the overall typical home in the region

About Zillow Group

Zillow Group, Inc. (NASDAQ: Z and ZG) is reimagining real estate to make it easier to unlock life's next chapter. As the most visited real estate website in the United States, Zillow® and its affiliates offer customers an on-demand experience for selling, buying, renting, or financing with transparency and ease.

Zillow Group's affiliates and subsidiaries include Zillow®; Zillow Premier Agent®; Zillow Home Loans™; Zillow Closing Services™; Trulia®; Out East®; StreetEasy®; HotPads®; and ShowingTime+℠ , which houses ShowingTime®, Bridge Interactive®, and dotloop® and interactive floor plans. Zillow Home Loans, LLC is an Equal Housing Lender, NMLS #10287 (www.nmlsconsumeraccess.org).

¹ Based on the Zillow Home Value Index

 

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SOURCE Zillow

FAQ

What is the current value gap between Black-owned homes and typical U.S. homes?

As of January 2023, the value gap is 14.8%, the smallest in over two decades.

How much equity have Black homeowners gained since the pandemic began?

Black homeowners have gained approximately $84,000 in equity since the start of the pandemic.

What was the appreciation rate of Black-owned homes compared to white-owned homes since February 2020?

Black-owned homes appreciated by 42.5%, compared to 37.8% for white-owned homes.

What are some barriers to homeownership for Black Americans?

High mortgage denial rates and systemic discrimination are significant barriers for Black applicants.

Which cities saw the largest reduction in the home value gap for Black homeowners?

Detroit saw the largest reduction in the gap, shrinking by 9 percentage points since February 2020.