The Home Value Gap Between Races Is Narrowing — Slowly: Zillow
Although Black and Latinx home values are still lower overall, new data from Zillow shows the gap between these groups has decreased by about 4 percent since the Great Recession.
Communities of color have long had to contend with issues surrounding housing discrimination. And while Black and Latinx home values remain lower overall, data from Zillow shows the gap between these groups has decreased by about 4 percent since the greatest disparity in values seen after the Great Recession.
Black-owned homes are worth 16.2 percent less and Latinx-owned homes are worth 10.2 percent less than the typical U.S. home, according to Zillow data released Tuesday. Non-Hispanic, white-owned homes and Asian-owned homes are typically valued 2.9 percent and 3.7 percent higher than the typical home.
The disparity between Black-owned home values and all home values was about 15 percent prior to the Great Recession and increased to 20 percent by March 2014. Latinx-owned home values reached a peak disparity between all home values in May 2012 at 14 percent, 2 percentage points higher than pre-recession.
The gap between home values across races peaked during the housing bust as subprime loans targeted vulnerable communities, and, as a result, ensuing foreclosures and dropping home values hit Black and Latinx homeowners particularly hard. Overall U.S. home value growth rebounded to become positive starting in August 2012, but it did not turn positive for Black and Latinx homes until two years later.
“It has taken nearly a decade for the home value gap to return to pre-recession levels, but still, the gap remains very large,” Zillow economist Treh Manhertz said in Zillow’s report. “With Black and brown communities and jobs hit disproportionately hard in the pandemic, there has been reason to worry another dip may be on the horizon that could slow or stop the progress. However, this is not the case, as the same factors that widened the gap in the Great Recession are not surfacing this time. Thanks to rock bottom rates on the most secure mortgages, extended forbearance programs, and rising home prices, there are no signs of another widening of the gap coming this year.”
“However, through these turbulent times, continued vigilance and targeted intervention by policymakers is crucial to keep the progress going for communities of color,” Manhertz added.
While the home value gap between races is gradually diminishing overall in the U.S., by how much varies widely by state and metro area. Large metro areas with the smallest gap between Black-owned home values and overall home values include Riverside, California (1 percent gap); San Antonio, Texas (3 percent); Las Vegas, Nevada (3 percent); and Portland, Oregon (4 percent). Metros with the widest gap between these home values include Detroit, Michigan (46 percent gap); Buffalo, New York (43 percent); Birmingham, Alabama (43 percent); St. Louis, Missouri (41 percent); and Milwaukee, Wisconsin (40 percent).