The COVID-19 pandemic made it difficult for the US Census Bureau to collect data on homeownership because in-person surveys became nearly impossible, especially before the vaccine development. As a result, the quarterly Current Population Survey/Housing Vacancies and Homeownership Survey (CPS/HVS), which has a substantially smaller sample size than the annual American Community Survey (ACS), showed greater fluctuation in the homeownership numbers from quarter to quarter.

Recognizing the pandemic significantly affected the accuracy of the 2020 ACS results, the Census Bureau decided not to release the data (though it did share individual-level data with experimental data tables, with a disclaimer that data should be used with “caution”). 

After a period of no reliable information on the racial homeownership rate, on September 15, the Census Bureau released 2021 ACS data. They surprisingly showed Black and Latino households experienced an increase in homeownership between 2019 and 2021, despite being hit disproportionately hard by the pandemic. But high inflation and housing costs threaten these gains, and it will take work to ensure they aren’t reversed.

The Black and Latino homeownership rates increased more than the white homeownership rate

The Black homeownership rate has experienced a continuous decline since the Great Recession, and Black households have been disproportionately affected by predatory lending practices (PDF), but the Black homeownership rate is finally showing gains. In both the ACS and CPS/HVS data, the Black homeownership rate has increased by around 2 percentage points.

Meanwhile, the Latino homeownership rate varied slightly across the two datasets (a 2.5 percentage-point increase in the ACS and a 0.9 percentage-point increase in the CPS/HVS) but increased in both. The variation is likely because of the CPS/HVS’s volatility. Its homeownership rate is frequently cited because it’s the most regularly updated, but quarterly fluctuations don’t always indicate actual shifts in homeownership. This indicates that the racial homeownership gap, though still wide, declined between 2019 and 2021.

Changes in the Homeownership Rate, by Race or Ethnicity, from 2019 to 2021

Source: 2019 and 2021 data from the ACS and the CPS/HVS.
Notes: ACS = American Community Survey; CPS/HVS = Current Population Survey/Housing Vacancies and Homeownership Survey. For the CPS/HVS data, the authors calculated the annual homeownership rate by averaging the four quarterly numbers.

This finding is largely in line with a recent Consumer Financial Protection Bureau report that presents findings from 2021 Home Mortgage Disclosure Act data that show increases in mortgage lending to Black and Latino households.  

The Black homeownership rate increased in most states

Though most states experienced Black homeownership rate increases, it’s important to consider differences in population size and mobility when interpreting these numbers and determining their significance.

By rate, Montana, Vermont, and Wyoming had the biggest increases in Black homeownership, but they also have some of the smallest Black homeowners and renter populations. Vermont actually lost both Black homeowners and renters, though the Black homeownership rate increased.

Interestingly, several states in the Mountain West and Midwest, such as Arizona, Idaho, Iowa, Minnesota, North Dakota, and Utah, experienced large increases in Black homeownership rates. In Arizona, the decrease in Black renters from 2019 to 2021 was mirrored by a similarly sized increase in Black homeowners.

In the other states, a decrease in Black renters and a slight increase in Black homeowners had a large effect on the homeownership rate because of the small overall Black population in these states. Larger states, such as Florida, Georgia, and Texas, had the largest increases in the number of Black homeowners, but the Black homeownership rate in these states changed by only 1.8 to 3.4 percentage points.

The Latino homeownership rate also increased in most states

Similarly, the states with the largest increases in Latino homeownership rates from 2019 to 2021 have very small Latino populations. But some states experienced large increases in Latino homeowner populations and homeownership rates. This happened in Connecticut, which gained 26,972 Latino homeowners from 2019 to 2021 as well as 1,947 Latino renters, for an 8.3 percentage-point increase.

Texas, which experienced only a 1 percentage-point increase in its homeownership rate, gained nearly 270,000 Latino homeowners, the most nationwide. Texas, along with Florida and California (also states with large Latino homeowner increases), experienced a small homeownership rate change because of the size of the Latino population and the increase in Latino renters, which is likely a sign of mobility, not of poor homeownership outcomes. Renters have a higher mobility rate than homeowners.  

Lack of affordable housing and high interest rates pose challenges moving forward

One reason for the increase in Black and Latino homeownership rates is age; many Black and Latino residents are in their prime homebuying years. In 2021, Black and Latino people’s median ages were 35.3 and 30.5, respectively, compared with 43.9 for white people.

Despite the pandemic’s negative effects on employment, swift government actions, such as forbearance and unemployment benefits, helped Black and Latino households sustain homeownership and helped many enter homeownership and benefit from historically low interest rates. Data show forbearance take-up was higher (PDF) among these households.

But quickly changing market conditions could impede this positive trajectory. Despite signs of a slowdown, home prices remain high and mortgage interest rates have more than doubled from last year, making homeownership less affordable, especially for Black and Latino households who, on average, have lower incomes because of structural barriers. Rising rent is also making it more difficult to save for future down payments.

Our research shows that homeownership transfers from parents to children. Those with wealthy homeowner parents—who are disproportionately white—are most likely to receive financial support and help navigating the complicated homebuying process. A well-targeted down payment assistance program, special purpose credit program, outreach, and counseling are among solutions that can reduce the racial homeownership and wealth gaps.   

Additionally, the state-level differences suggest policymakers should consider different priorities in different places to reduce the racial homeownership gap. For example, in the Midwest and Mountain West, affordability is not as much of a concern, but decreasing outward mobility and making such places welcoming and attractive to diverse populations will be key. In Texas, Florida, and Georgia, states with large Black or Latino populations, improving housing affordability can go a long way. 

The racial and ethnic homeownership gap narrowed for Black and Latino households relative to white households during the pandemic, but targeted and tailored policy supports are needed to ensure these gains don’t backslide.