Alaska among just five states affordable to Black American home buyers

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There are just four states in the US where the majority of
Black Americans can afford to buy a home, according to a new report from the
National Association of Realtors.

More than 60 percent of Black households can afford to buy a
home in Alaska, Kansas, Nebraska, South Dakota, and Vermont, according to the
report.

However, less than a third can afford ownership in California,
Colorado, Hawaii, Massachusetts, Montana, Nevada, Oregon, Utah, Washington
state, Wyoming and the District of Columbia.

There are only four states where less than half of white
households can afford to buy a home: California, Hawaii, Oregon and Washington
state.

More than half of Asian households can afford to purchase a
home in all but six states – California, Colorado, Hawaii, Montana, North Dakota,
Wyoming – and the District of Columbia.

“This data reinforces the need to implement key policy
initiatives NAR developed in concert with the Urban Institute and the National
Association of Real Estate Brokers to address the Black homeownership gap,”
said NAR president Charlie Oppler.

NAR’s Snapshot of Race & Home Buying in America survey
found that minority homeownership stubbornly lags behind the national rate,
with Black Americans facing some of the toughest hurdles to owning their own
home.

The homeownership rate for Black Americans – 42 percent – is
nearly 30 percent less than the rate for white Americans – 69.8 percent. The
U.S. homeownership rate stands at 64.2 percent, with the rates for Asian and
Hispanic Americans at 60.7 and 48.1 percent, respectively.

Regarding home affordability nationwide, 43 percent of Black
households can afford to buy the typical home compared to 63 percent of white
households, 71 percent of Asian households and 54 percent of Hispanic
households, according to the study, while wide variances in affordability exist
by state.

NAR believes policy proposals such as the Biden
administration’s first-time buyer tax credit of up to $15,000 would help
address many of these underlying problems. Under the proposal, home buyers
would receive the tax credit when making the home purchase, rather than having
to wait until filing federal income taxes the following year.

NAR also believes the first-time buyer tax credit should be
accompanied with incentives to create more affordable housing units to prevent
the credit from further aggravating the current shortage.

“Specifically, this five-point plan developed in 2019 calls
on the nation to: advance policy solutions at the local level; tackle housing
supply constraints and affordability; promote an equitable and accessible
housing finance system; provide further outreach and counseling initiatives for
renters and mortgage-ready millennials; and focus on sustainable homeownership
and preservation initiatives,” said Oppler.

Chief Economist Lawrence Yun commented, “The residential
housing market’s strong performance during the pandemic helped homeowners enjoy
a significant increase in wealth via approximately $1 trillion in additional
home equity over the last year.

“However, as indicative of the K-shaped economic recovery,
greater numbers of potential first-time homebuyers – many of whom are
minorities – are feeling discouraged by disproportionate job losses.
Essentially, they’re being priced out of owning a home because of rapidly
rising home prices resulting from historically-low housing inventory.

“For Black Americans, in general, the greater likelihood of
having student loan debt, combined with lower household incomes and accrued
savings when compared to the national average, adds to the challenge.”

NAR’s Snapshot of Race & Home Buying in America report
examines the homeownership rate among each race in 2019 using American
Community Survey data by state and the changes in the homeownership rate by
race from 2009 to 2019. Using the Profile of Home Buyers and Sellers data from
2020, the report looks into the characteristics of who purchases homes, why
they purchase, what they purchase, and the financial background for buyers
based on race.

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