A combination of rising mortgage rates and continually increasing home prices are making it significantly more difficult for African American families to buy their own home, according to statistics compiled by the Harvard University Joint Center for Housing Studies.
In the last year, the number of Black renters able to purchase a median-priced home dropped by some 44%. During those same months, interest rates jumped by nearly 2% from 3.0% to 4.9%.
Put another way, 14.2% of all African American renter households in April 2021 could afford to buy a median-priced home. By this spring, the number was down to 6.9%.
According to the Center, mortgage payments increased by 35%, from $2,100 in the spring of 2021 to exactly $2,800 as of this year.
Says the Center report: “In April 2021, a household had to earn at least $79,570 a year to afford payments on the median-priced home of $340,700. One year later the income requirement stood at $107,500 for the median-priced him of $401,700.”
Altogether, the change means a loss of 4 million potential home buyers in the median-priced market.
Continues the report: “While Black renter households were not the only group to face declining affordability, the share of Black renter households who could afford the median-priced home declined most by race/ethnicity.”
For all of that, the report also notes the impact interest rates in general can have on homebuying: low interest rates in 2020 and more than half of 2021 “helped many first-time homebuyers qualify for mortgages while also providing current owners a chance to reduce their monthly mortgage payments through refinancing.”
By Garry Boulard
