In Nearly Every State, People of Color Are Less Likely to Own Homes Compared to White Households
In every state across the US, Black, Hispanic, and Native American households have lower homeownership rates than white households; likewise, Asian households were less likely to be homeowners in all states but Hawaii. While these racial homeownership gaps vary somewhat state-to-state, their extent and persistence across the country demonstrate the need for coordinated policies and programs—at the state and national level—to address these gaps.
According to Center tabulations of the American Community Survey, fully 71.7 percent of white households owned their homes in the US in 2015–2019 compared to 47.0 percent of households of color, representing a 24.6 percentage point racial homeownership gap. (Households of color are those headed by someone who identifies as Hispanic, or as some race other than white.) The data for the interactive chart below show how these homeownership rates and the size of the racial homeownership gap vary by different racial/ethnic groups in all 50 states plus Washington, DC. We use the 5-year American Community Survey because it produces a larger sample size in less populous, less diverse states like Montana, Wyoming, and Vermont, which allows us to make more detailed comparisons by race/ethnicity in all states.
Figure 1: In Nearly Every State, People of Color Are Less Likely to Own Their Homes than White Households
While homeownership rate gaps are pervasive, they tend to be largest in states in the Northeast and Midwest. The homeownership rate gap between white households and households of color exceeded 30 percentage points in 13 states, for example, with the widest gaps in Connecticut (35.8 percentage points), South Dakota (35.7 percentage points points), North Dakota (35.7 percentage points), and Wisconsin (35.4 percentage points). Gaps exceeded 30 percentage points in both relatively low-cost states like Iowa and Michigan, as well as higher-cost states like New York and Massachusetts.
Racial homeownership gaps persisted but were somewhat narrower in many Western states. Indeed, the racial homeownership gap was below 20 percentage points in 12 states, with the smallest gaps in New Mexico (8.4 percentage points), Wyoming (14.8 percentage points), Washington, DC (15.2 percentage points), and California (16.5 percentage points). In fact, only in Hawaii were people of color (59.1 percent) more likely to own their homes than white households (56.4 percent), driven at least partially by the lowest homeownership rate among white households nationally outside of Washington, DC and the highest homeownership rate among Asian households (70.4 percent).
However, the racial homeownership gap is most striking for Black households. At just 41.7 percent, Black households have the lowest homeownership rate nationally—30.0 percentage points lower than white households. Indeed, Black-white homeownership gaps exceeded 30 percentage points in 37 states, including 10 states where they exceeded 40 percentage points. Homeownership rates among Black households also varied significantly across the country. Under a quarter of Black households were homeowners in four states with small Black populations: North Dakota (9.0 percent), South Dakota (22.2 percent), Hawaii (24.2 percent), and Minnesota (24.2 percent). Meanwhile, homeownership rates were highest in a handful of Southern states with large Black populations. Indeed, between 50.1 and 52.8 percent of Black households were homeowners in Alabama, Delaware, Maryland, Mississippi, and South Carolina.
While not as stark, other households of color are also far less likely to own their homes than white households. Nationally, 46.8 percent of Hispanic households owned their homes, 24.9 percentage points lower than white households. By state, the Hispanic-white homeownership rate gap exceeded 30 percentage points in 15 states. The racial homeownership gaps for Hispanic households were largest in the Northeast, where homeownership rates for Hispanic households were also lowest. Indeed, just over a quarter of Hispanic households owned their homes in New York (25.4 percent), Massachusetts (26.8 percent), and Rhode Island (30.3 percent). On the other end, more than half of Hispanic households owned their homes in 19 states, with the highest homeownership rates in New Mexico (65.2 percent), Wyoming (58.8 percent), and Michigan (57.4 percent).
Nationally, fully 56.7 percent of Native American households owned their homes, 15.0 percentage points lower than white households. Native American-white homeownership rate gaps exceeded 30 percentage points in five states. Across all states, Native American homeownership rates varied from about one-quarter in Hawaii to over three-quarters in Delaware. In the five states with the largest Native American populations—which collectively contained 43 percent of Native American households—homeownership rates for Native households were 52.5 percent in California, 55.8 percent in Arizona, 62.2 percent in New Mexico, 63.0 percent in Oklahoma, and 65.8 percent in North Carolina.
At 59.4 percent, Asian households had the highest homeownership rates among households of color. However, it was still 12.2 percentage points lower than white households. The Asian-white homeownership rate gap exceeded 30 percentage points in just two states: North Dakota (42.8 percentage points) and South Dakota (39.9 percentage points). Homeownership rates for Asian households were in fact lowest in these two states, at 24.1 and 32.4 percent, respectively. On the high end, two-thirds of Asian households owned their homes in Hawaii (70.4 percent) as well as four Southern states: South Carolina (66.6 percent), Virginia (67.2 percent), Florida (69.2 percent), and Maryland (69.5 percent).
The pervasiveness and severity of racial homeownership gaps indicates that there is no single cause of the gap. Households of color overall and Black homebuyers in particular have been precluded from accessing and sustaining homeownership through a history of redlining, segregation, and other forms of discrimination within and outside the US housing market. These historical and contemporary realities have collectively prevented households of color from accumulating the kind of wealth that’s increasingly necessary to afford homeownership in today’s market. Just as there’s no single cause, there’s no one solution to solving these challenges. Special purpose credit programs and other lending efforts that offer downpayment assistance, interest rate reductions, or more flexible lending requirements for homebuyers of color have the potential to narrow racial homeownership gaps directly. These successes can be aided and sustained through homeownership counseling and the kinds of emergency assistance offered to homeowners during the pandemic, such as the widespread availability of loan forbearance or the Homeowner Assistance Fund. Moreover, supply-side solutions aimed at expanding the amount of housing available will help alleviate supply shortages in constrained markets and ultimately keep home price growth in check.