Minority groups gain ground in mortgage market, though disparities persist
A new Redfin report has revealed a shift in the demographics of US mortgage holders. While White homebuyers still represent the majority, their share has steadily declined over the past five years.
The report showed that the share of home loans taken out by White borrowers in the United States has declined over the past five years, while the shares for Hispanic, Black, and Asian buyers have increased modestly.
Over 62% of new mortgages issued last year went to White homebuyers, down from 64% in 2022 and 70.4% in 2018.
Meanwhile, Hispanic buyers accounted for 14% of new mortgages in 2023, up from 12.6% in 2022 and 11% in 2018. Black buyers represented 8.7% last year, barely changed from 8.6% in 2022 but higher than 7.1% in 2018. Asian buyers took 8.2% of new mortgages, the same as in 2022 but up from 6.4% five years ago.
“The pool of homebuyers taking out mortgages is becoming less White because America is becoming more diverse, and many people of color are in their prime homebuying years,” said Redfin senior economist Elijah de la Campa.
Rising incomes boost homeownership
In recent years, Hispanic, Black and Asian households have seen larger income gains than White households, helping make homeownership more attainable despite the racial wealth gap.
Median Hispanic income rose 40.2% from 2018 to an estimated $69,000 in 2023, compared to a 31% gain for White households to $86,000. Black incomes climbed 34.7% to $54,000, while Asian incomes jumped 36.4% to $114,000.
De la Campa cited the tight labor market providing more opportunities in marginalized communities as one factor narrowing racial income disparities.
Homeownership gaps persist
Despite the shifting mortgage trends, large homeownership gaps remain across racial/ethnic lines. An estimated 74% of White households own homes, compared to just 62.2% of Asians, 49.9% of Hispanics, and 45.7% of Blacks.
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While the White homeownership rate has stagnated, minority groups have made modest gains in catching up, though analysts say more progress is needed to address longstanding inequities.
The Redfin analysis also showed mortgage volumes declined across all groups over the past year amid higher interest rates and home prices, but the drops were steepest for White borrowers.
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