Hispanic and African Americans in the middle class are struggling to afford housing.
As home prices continue to rise, and inventory continues to be low, many in the middle class are unable to purchase a home. According to a recent report from Redfin, home prices in 30 of the U.S.’s metros increased 26 percent in the past five years, while the median household income only rose 1.6 percent. In 2012, a household earning the median income could afford nearly half (44 percent) of homes for sale, and by last year, that number fell to 32 percent.
That’s across ethnicities. When you break down, African Americans and Hispanics are suffering even greater in regards to homeownership. Last year, 14 percent of homes in the 30 largest metros were affordable to African American families earning the median income, and 18 percent for Hispanic households earning the median income. For white households, 30 percent of houses are affordable to those earning the median income.
African Americans and Hispanics have had low rates of homeownership since 2004. In the first quarter of this year, 72 percent of white households were homeowners, while only 47 percent of Hispanic families and 43 percent of African Americans owned homes.
Of the 30 metros in the study, St. Louis was the only market that became more affordable for median-income Hispanic and African-American families from 2012 to 2016. In western parts of the country, specifically Denver, Los Angeles, Portland, San Francisco, San Diego and Phoenix, less than 5 percent of homes are affordable to the African American and Hispanic families earning the median income.