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Where It Takes Longest For Black Families to Afford a Home

Homeownership has long been the benchmark when it comes to measuring wealth in the U.S. Purchasing a house however has become exceedingly difficult and more people are opting to rent. For black families, the freedom to buy a home is even more arduous. In the U.S., roughly 65% of the population is a homeowner, while 72% of the white population owns a home. In comparison, only about 45% of black people are homeowner.

In some states, the wealth gap between white and black families means it takes far longer for black families to be able to buy a home. In some states it take upwards of 10+ years to afford a home compared to white families. In this report we take a look at that data.

Where It Takes Longest for Black Families to Afford a Down Payment

On average it takes the average Black family 10.13 years to save up for a home. White families in comparison take roughly 6.57 years to do the same. In some states however, it can take as much as 20 years for a black resident of that state to afford a home. Here is the breakdown by state.

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How Much Longer Does it Take Black Families Compared to White Families?

Where it takes Black families the longest compared to White families paints a picture of racial inequality in several states throughout the country. In no state does it take the average black family to save for a home quicker than a white family. The lowest difference was about 3/4 of a year in New Mexico and the longest was 12.1 years in Washington DC. On average it takes a Black family 3.56 years longer to afford a down payment on a home than white families.

The states where the affordability gap is highest tends to be coastal though there are a few exceptions like Montana and Colorado.

Data By State

Selected GeographiesMedian White Household IncomeMedian Black Household IncomeMedian Household ValueAverage White Household Savings/YearAverage Black Household Savings/YearTime(White Family Afford Down Payment)Time(Black Family Afford Down Payment)Difference
District of Columbia$174,877$71,107$617,900.00$13,990.19$5,688.588.8321.7212.9
Montana$75,153$42,550$249,200.00$6,012.26$3,403.998.2914.646.4
Hawaii$110,633$80,518$631,700.00$8,850.66$6,441.4614.2719.615.3
California$104,321$75,297$546,800.00$8,345.71$6,023.8013.1018.155.1
Wisconsin$84,894$45,183$188,500.00$6,791.49$3,614.655.5510.434.9
Massachusetts$116,514$74,847$400,700.00$9,321.16$5,987.778.6013.384.8
New Jersey$124,627$75,626$344,000.00$9,970.17$6,050.116.9011.374.5
Minnesota$99,322$56,612$235,400.00$7,945.77$4,528.975.9310.404.5
New Hampshire$102,017$60,478$270,000.00$8,161.34$4,838.226.6211.164.5
Louisiana$85,140$45,049$167,300.00$6,811.21$3,603.894.919.284.4
Connecticut$122,420$70,009$277,400.00$9,793.59$5,600.715.669.914.2
Nevada$83,750$56,826$292,200.00$6,699.98$4,546.078.7212.864.1
Maine$77,612$47,374$197,500.00$6,208.96$3,789.906.3610.424.1
Colorado$98,009$68,994$373,300.00$7,840.74$5,519.509.5213.534
South Carolina$81,108$46,782$170,800.00$6,488.66$3,742.585.269.133.9
Virginia$110,320$69,621$281,700.00$8,825.57$5,569.706.3810.123.7
New York$107,980$72,542$325,500.00$8,638.42$5,803.357.5411.223.7
Illinois$99,645$57,474$203,400.00$7,971.61$4,597.915.108.853.7
Ohio$83,285$46,462$151,100.00$6,662.81$3,716.974.548.133.6
Pennsylvania$90,013$53,247$186,000.00$7,201.01$4,259.735.178.733.6
Rhode Island$91,077$61,321$273,800.00$7,286.18$4,905.697.5211.163.6
Iowa$80,899$45,881$152,000.00$6,471.91$3,670.514.708.283.6
Florida$83,821$55,363$230,600.00$6,705.64$4,429.046.8810.413.5
Michigan$84,509$48,681$162,500.00$6,760.73$3,894.524.818.353.5
Washington$99,464$72,480$373,100.00$7,957.10$5,798.399.3812.873.5
Mississippi$74,031$41,445$123,300.00$5,922.47$3,315.594.167.443.3
Alabama$78,644$46,610$147,900.00$6,291.51$3,728.824.707.933.2
North Carolina$82,627$52,253$180,600.00$6,610.13$4,180.275.468.643.2
Arkansas$70,406$41,743$133,100.00$5,632.49$3,339.454.737.973.2
Oregon$84,807$64,197$341,800.00$6,784.55$5,135.7810.0813.313.2
Indiana$78,352$47,461$147,300.00$6,268.17$3,796.894.707.763.1
Kentucky$72,259$44,958$148,100.00$5,780.75$3,596.675.128.243.1
South Dakota$76,396$49,270$171,500.00$6,111.69$3,941.605.618.703.1
Missouri$80,522$50,287$162,600.00$6,441.79$4,022.925.058.083
Georgia$90,905$58,693$189,900.00$7,272.40$4,695.475.228.092.9
Tennessee$78,779$51,741$177,500.00$6,302.34$4,139.305.638.582.9
Delaware$97,411$68,041$255,300.00$7,792.86$5,443.266.559.382.8
Kansas$83,758$52,388$159,400.00$6,700.65$4,191.024.767.612.8
Nebraska$82,317$52,713$161,800.00$6,585.33$4,217.024.917.672.8
North Dakota$89,374$59,325$198,700.00$7,149.90$4,746.035.568.372.8
Oklahoma$74,284$47,341$140,000.00$5,942.72$3,787.254.717.392.7
West Virginia$65,135$41,136$121,300.00$5,210.76$3,290.884.667.372.7
Vermont$81,881$59,370$233,100.00$6,550.44$4,749.647.129.822.7
Maryland$123,737$88,806$324,800.00$9,898.94$7,104.506.569.142.6
Alaska$98,364$73,876$276,100.00$7,869.13$5,910.107.029.342.3
Texas$88,267$63,375$186,000.00$7,061.36$5,070.015.277.342.1
Utah$91,867$73,656$303,300.00$7,349.37$5,892.528.2510.292
Arizona$79,913$64,025$241,100.00$6,393.05$5,122.037.549.411.9
Idaho$75,410$61,871$233,100.00$6,032.81$4,949.697.739.421.7
Wyoming$82,005$71,838$230,500.00$6,560.40$5,747.047.038.021
New Mexico$67,770$60,217$174,700.00$5,421.56$4,817.356.447.250.8

Affording a Down Payment Does Not Equal Affording a Home

Affording the down payment on a home is just one of many struggles potential black home buyers will face in their journey. For this study we used 20% as the down payment – the benchmark number people have to hit to avoid mortgage insurance. The reality is however, many opt for a smaller down payment – as low a 3% for Fannie Mae loans.

That being said, even in cases where a black family can afford the down payment on a home there are many hurdles along the way. Some hurdles include racism and discrimination at the hand of real estate agents and companies. For example, this report by Newsday in Long Island found agents would only show select housing options to black and brown home buyers.

Lower Access to Mortgages

A potentially even bigger hurdle for black home buyers is less access to credit i.e a mortgage. According to the Consumer Financial Protection Bureau, in 2017 25% of all black mortgage applications were denied. In comparison, 17% of Hispanic applicants were denied and only 10% of white applicants were denied.

In some states, the difference between white application denials and black application denials are over 2x as much. In Washington DC over 200% more applications from black homebuyers are rejected than for white homebuyers. Here is the state by state data.

Data of Mortgage Application Rejections by State

StateBlack RejectionsBlack ApprovalsBlack Total ApplicationsWhite RejectionsWhite ApprovalsWhite Total ApplicationsDenial Percentage BlackDenial Percentage White% Difference
District of Columbia21683795799198773901163927%8%220%
South Carolina118731479433957235779812115490735%15%130%
North Dakota481242111981144541955623%10%125%
Mississippi8135106612292310030382695900035%17%109%
Nebraska39695617145990373925315323%11%105%
Wisconsin1304274952172327013232518879125%12%103%
Missouri34116561134432506212411819572325%13%98%
Illinois940417292360614473421351633774626%13%97%
Pennsylvania849513293284165059020867733222530%15%96%
North Carolina1497728724585423877618464629324626%13%93%
Alabama108971497032601229988298113294833%17%93%
Louisiana98801377130928169276224910211932%17%93%
Michigan618211277225124495920488131521027%14%93%
Montana36881504390231823424524%13%87%
Arkansas31254479972015034532988739832%17%87%
Alaska1323446961921107731889219%10%87%
Virginia1160325928496942906014550123194723%13%86%
Maryland140113194362188170188587113812723%12%83%
Tennessee737713578270193346714112722299527%15%82%
Massachusetts25646849123712199112577919147921%11%80%
South Dakota531762662709178702449620%11%80%
Minnesota1381423072952104313221319508519%11%76%
Ohio718314107275904765220701632104026%15%75%
Delaware1699354169034165183942944825%14%74%
Kansas681170031689472517287664621%12%74%
Indiana33467264136373100314367321818525%14%73%
Georgia2365847125952953728315809125870825%14%72%
New Jersey574611151239502937012378420903324%14%71%
Maine931753437308286824510327%16%67%
New York749015055302124094017863827549425%15%67%
Iowa3871198194811606703769701220%12%66%
Connecticut18844180793112482540388699424%14%66%
Oklahoma16663172615016161606169742427%17%63%
Wyoming391061852523125551876721%13%57%
Florida21808400698197011512839554867381927%17%56%
Washington17535889102812932117201426142317%11%52%
Rhode Island31393516144156214913245619%13%51%
Arizona19436220110873468818095529631618%12%50%
Texas18162419238226910554442410171300322%15%49%
Vermont24711142440115201728421%14%49%
Colorado18226130107933278018289028834517%11%48%
California13410362826842112973858745196981720%13%47%
New Hampshire1012805027136300664870520%15%37%
Nevada146348098558137586898210904817%13%35%
Oregon37212882264185709676615176116%12%34%
West Virginia35261412009869272424481229%22%33%
Kentucky171640227352231198108012964123%18%31%
Utah1648061282154909879815452613%10%28%
Idaho572403859096510657451015%12%21%
New Mexico27868513059878321225597021%18%21%
Hawaii120565891184995661455813%13%6%

Methodology

To determine how long it took for a black or white family to afford a home in each state we looked at the 2018 American Fact Finder data from Census.gov. We found the median household income for black and white families in each stat and the median home value in that state.

Next, we took the national savings rate in the U.S. which is about 8% per month. Then we took our down payment threshold as 20% which is the widely considered benchmark (though not necessarily what everyone pays). We then determined on average how much a black and white family saves in a year, then divided the average down payment in that state by that value to get the years it would take to save for that down payment.

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