Homebuyers across the U.S. are facing an unprecedented series of hurdles in one of the most challenging real estate markets seen in decades, and for buyers of color, those obstacles are even greater. The Latino homeownership rate rose to 48.4 percent in 2021, up from 47.5 percent in 2019, and from 2019 to 2020, the Black homeownership rate rose from 42.1 percent to 43.3 percent, but while supply is dwindling in many expanding markets for minority buyers, prices are still rising.
In addition, a large share of younger minority buyers are flooding the housing market, but most carry more student loan debt than their White counterparts and lack intergenerational wealth that could help with down payments, The Washington Post reports. For first-time minority buyers, barriers to homeownership are stacking up, especially as home prices and mortgage rates continue to reach new highs.
Odeta Kushi, deputy chief economist for real estate data and title company First American Financial Corporation, says millennial home buyers across all demographics are facing a unique set of headwinds that could dampen the house-buying power of a group that’s crucial to the overall housing market.
“These are people in their prime home-buying years that are in a market that’s been undersupplied for years and that’s particularly acute at the starter stage,” says Kushi. “So even if they’re seeing their incomes rise, as many are, rising rates and higher prices will still erode affordability and that could keep them on the sidelines.”