Homeownership remains one of the tried-and-true ways to build wealth. Middle-class households made more than $2 trillion from homeownership over the 10 years, yet for the most part Black Americans have missed out on the wealth.
Black homebuyers made up a mere six percent of the total homebuyers in 2021, found a National Association of Realtors (NAR) report. This figure has not changed significantly the past two decades. Black Americans are weighed down by student loan debt to a greater degree than their white counterparts and could not afford to take part in the housing boom.
“Unfortunately, race hasn’t really changed much this year. We’re still seeing pretty consistent, low shares of minority homebuyers,” NAR’s Jessica Lautz told AFP.
But if you did buy a home a decade ago, you probably made a healthy profit.
Younger households with moderate incomes who purchased a home within the last 10 years experienced major wealth gains. Housing wealth across nearly 1,000 U.S. cities went up by more than $8 trillion since 2010, according to a new study by the NAR.
Middle-class households enjoyed a housing wealth of $2.1 trillion, which is 26 percent of overall housing wealth gains over that time period.
Homeowner wealth gains were due to the rapid rate of home value appreciation in the U.S. According to NAR estimates, 86 percent of the wealth of homeowners gained comes from home appreciation, with the median sales price of a home increasing at an annual 8.3 percent between 2011 and 2021.
The metro areas where middle-class homeowners saw the biggest wealth gains over the past 10 years are:
- Phoenix-Mesa-Scottsdale, Ariz. (+ $103,690)
- Austin-Round Rock, Texas ($61,323)
- Nashville-Davidson-Murfreesboro-Franklin, Tenn. ($55,252)
- Dallas-Fort Worth-Arlington, Texas ($53,421)
- Houston-The Woodlands-Sugar Land, Texas ($52,716)
Lower income households didn’t see the same measure of wealth growth. They make up 27.2 percent of all homeowners, but saw only 4 percent of the wealth gain, Fortune reported.
Home appreciation rates are better than ever. Currently, median home values are 20 percent higher than they were in January 2021, according to online real estate marketplace Zillow.