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Pandemic Led to Sharp Spike in Minority Homeownership

By November 3, 2022January 18th, 2023No Comments

By Abha Bhattarai & Alyssa Fowers | The Washington Post

The pandemic housing boom marked a new — though possibly short-lived — entrée into homeownership for Black, Asian and Latino families, many of whom had for years been sidelined into the much costlier rental market.

Helped by pandemic-era stimulus programs, Black, Latino and Asian households saw the sharpest increase in homeownership in 2021 since the Great Recession, when all their levels of owning had fallen, according to an analysis of new federal data by The Washington Post. The growth for minority households was more pronounced than for White households.

The recent housing surge also led to seismic changes in the rental market in 2021, as fewer Americans of every race and age rented for the first time since the Great Recession. For African Americans, 2021 marked the first time their share of the rental market dipped since 2000.

While these trends have likely stalled in the more recent housing cool down, they offer a glimmer of hope in narrowing the vast and historically-rooted racial gap in homeownership, which tends to be more affordable than renting over time. Housing experts say 2021 will go down as a significant year for access to homeownership, reversing trends that largely bypassed people of color from the benefits of homeownership in the years following the 2007-2008 housing crisis.

“We’re seeing a real spark in Black and Latino homeownership because people — in large part, millennials — were able to save during the pandemic,” said Andre Perry, a senior fellow at the Brookings Institution. “Now whether it’s sustained, that’s a different story. But what you saw in 2021 is a good thing because homeownership creates wealth and other opportunities that benefit entire communities.”

During the pandemic, Black and Hispanic Americans, in particular, were disproportionately hit by layoffs and were at higher risk of covid-related complications early in the pandemic. But federal stimulus checks, combined with rental assistance and student loan freezes meant that many families were able to save at record rates beginning in 2020. Rock-bottom interest rates made it cheaper to borrow for a house.

For a subset of renters with steady jobs and enough savings to fashion a down payment, that boost was enough to nudge them into homeownership earlier than they’d anticipated.

About this story
This story uses microdata from the decennial census and the American Community Survey (ACS). Census and ACS data were accessed via IPUMS for the years 1980-2020 and via tidycensus for 2021. The 2007 and 2010 data points each include three years of data, while the 2015 and 2020 data points each use five years of data and 2021 uses a one-year sample.

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