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Discussions surrounding homeownership rates often happen in April, the month of Fair Housing. The Black-White homeownership rate gap is cited repeatedly as a nearly 30% age point spread, which is as wide a spread as when the Fair Housing Act was passed in 1968. While the homeownership rate is one often-used housing yardstick, sustainable ownership is another. What do we find in the middle of those two bleak numbers? And where are we now?
According to the Snapshot on Race and Home Buying in America, which uses Census ACS data, the homeownership rate for Black Americans is 42%, Hispanic Americans 48.1%, Asian Americans 60.7%, and White Americans 69.8%.
COVID-19 impacted households on an unequal level, represented in a K-shaped recession and recovery. Those who could bring their laptops home did, driving the demand for new homes that accommodate not only zoom offices, but also zoom homeschooling rooms – all in zoom towns.
Those who could not pop their laptop off the docking station and move it into a new home office have encountered job losses and reduced hours, with little safety net, despite being deemed "essential." When the pandemic began, the Census started a new research area: The Household Pulse Survey*, which is collected on a bi-weekly basis, with questions that have changed throughout the pandemic. Taking a snapshot of the most recent report shows a clear picture – those encountering job losses are having a difficult time maintaining their mortgage payments.
When looking at the differences in housing status, those who are relying on regular income sources like those used before the pandemic are more likely to own their home outright at 33% compared to 23% of those currently on unemployment insurance. Eight percent of those on unemployment insurance have no confidence they can make next month's mortgage payment, a share that rises to 21% among those who borrowed money from friends or family in the past seven days.
Source: NAR Analysis. Housing Table 1a. Last Month's Payment Status for Owner-Occupied Housing Units, by Select Characteristics: United States. U.S. Census Bureau Household Pulse Survey, Week 27.
When examining the same trends by race and ethnicity, distinct patterns can be found in the data. Hispanic and Latino homeowners are most likely to currently have a mortgage on their home, at 73%, while those who are White are most likely to own their home outright. When asked if the owner is currently caught up on their mortgage, Hispanic/Latino owners are least likely to be caught up at 18%, followed by 17% of Black owners. White homeowners are the most likely to be caught up, at 93%.
Source: NAR Analysis. Housing Table 1a. Last Month's Payment Status for Owner-Occupied Housing Units, by Select Characteristics: United States. U.S. Census Bureau Household Pulse Survey, Week 27.
Census does look forward to the ability of the respondent to pay the next month's mortgage payment as well. Unfortunately, the same patterns persist in the data set. Hispanic/Latino owners are least likely to have confidence they can make the mortgage payment next month. For Hispanic/Latino owners, only 53% have a high amount of confidence they can make their payment. For Black homeowners, this rises to 56%. Among White owners, the share is 79%.
The job losses already felt in the country have been noted as more likely to be minority adults. The homeownership gap is persistently wide. This data shows yet one more instance of an unequal playing field when it comes to housing – the ability for families to make last month's and this month's mortgage. For some, it may unfortunately mean selling their home if reduced hours and job losses move from temporary to permanent. For now, there is a safety net which allows mortgage borrowers to request initial forbearance for HUD/FHA, USDA, VA, Fannie Mae, and Freddie Mac loans until June 30, 2021.
Source: NAR Analysis. Housing Table 2a. Confidence in Ability to Make Next Month's Payment for Owner-Occupied Housing Units, by Select Characteristics: United States U.S. Census Bureau Household Pulse Survey, Week 27.
*This blog post is based on data from week 27, which includes 77,104 survey respondents. While the Census Bureau urges caution when analyzing data by groups, the standard error for racial groups is less than 3.4% for all groups reported in this blog post. The category of "Two or more races + Other races, not Hispanic" was not analyzed here as the standard error was more than 5%.
