As Starter Homes Become Increasingly Difficult to Afford, Black Households Are at an Even Greater Disadvantage

While the current housing market is unaffordable for many American households, recent data show underrepresented communities are even more affected by the state of the market. According to real estate data tracker Redfin, the average Black family can afford a starter home in just 10 of the 50 most populous U.S. metros. Comparatively, the typical white family can afford a starter home in 32 of these metros.

The median income for a white household is $90,995, while the median U.S. income for a Black household is $57,129. This means, in order to afford the typical U.S. starter home, which costs $250,000, a white family would spend about 26% of its earnings, while a Black family would have to spend 41% of its earnings.

“Starter homes have become increasingly difficult for everyone to afford, with prices of the typical starter home up 8% in the last year alone. That has pushed buyers who earn more money to buy starter homes and pushed lower-income buyers out of the market altogether–and many of those lower-income buyers are Black,” said Redfin Senior Economist Elijah de la Campa. “The encouraging news is that while there’s still a major homeownership gap between Black and white families, there are signs more Black Americans could start getting their foot in the door:  The share of U.S. mortgages taken out by Black homebuyers has ticked up recently, and the racial wage gap is shrinking.”

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