African-American Homeownership Lowest Since 1968: What If It’s Not All Race?

Happy Monday, everybody!

So if you haven’t seen it yet, Inman ran a big article last Friday talking about a statement by Bryan Greene, NAR’s director of Fair Housing policy:

“We’ve seen homeownership rates among racial groups steadily rise, but I think many of us would have expected rates to have risen more,” Greene added. “We did see that happen for a period from the early 90s to the early part of this century, but dramatically, at least for African Americans, we started to see that homeownership rate decline — so much so that last year the homeownership rate for African Americans dipped below the rate in 1968 when the Fair Housing Act was passed.”

That’s not good for anybody, and it truly is a shame that homeownership rates in the black community is (1) so low, and (2) falling instead of rising.

In light of the massive scandal that was Long Island and racial steering by REALTORS, it makes sense for NAR to jump on this issue and do something — or at least be seen as doing something. And I assume (judging by the comments thus far from the community) that the real estate industry will now spend quite some time wringing its hands, wearing sackcloth and ashes, and exhorting one another to be more racially sensitive.

I kind of expect Glenn Kelman to be on main stage at Inman Las Vegas this summer telling the industry that its overwhelming whiteness means it has to bend over backwards to prove it isn’t racist. Again.

And all of that is welcome in the aftermath of Long Island. Really. If you’ve read my post on the subject, you know that I grew up on Long Island, and may have been a victim of steering myself. So yeah, I’d love to see the real estate industry root out even the vestige of racism.

Having said that… what if the African-American homeownership problem isn’t about race at all… except maybe distantly? What if it’s about something else that is far more important to the future of the industry?

The Future of Children Study

Let me introduce you to a scholarly article I found recently researching something else (which I’ll explain below). It’s a study by R. Kelly Raley, Prof. of Sociology at UT Austin, Megan Sweeney, Prof. of Sociology at UCLA, and Danielle Wondra, a Ph.D. candidate at UCLA, and it’s titled “The Growing Racial and Ethnic Divide in U.S. Marriage Patterns.” It was published in Future of Children, jointly published by Princeton University and Brookings Institute.

Here’s the abstract:

The United States shows striking racial and ethnic differences in marriage patterns. Compared to both white and Hispanic women, black women marry later in life, are less likely to marry at all, and have higher rates of marital instability. Kelly Raley, Megan Sweeney, and Danielle Wondra begin by reviewing common explanations for these differences, which first gained momentum in the 1960s (though patterns of marital instability diverged earlier than patterns of marriage formation). Structural factors—for example, declining employment prospects and rising incarceration rates for unskilled black men—clearly play a role, the authors write, but such factors don’t fully explain the divergence in marriage patterns. In particular, they don’t tell us why we see racial and ethnic differences in marriage across all levels of education, and not just among the unskilled. Raley, Sweeney and, Wondra argue that the racial gap in marriage that emerged in the 1960s, and has grown since, is due partly to broad changes in ideas about family arrangements that have made marriage optional. As the imperative to marry has fallen, alongside other changes in the economy that have increased women’s economic contributions to the household, socioeconomic standing has become increasingly important for marriage. Race continues to be associated with economic disadvantage, and thus as economic factors have become more relevant to marriage and marital stability, the racial gap in marriage has grown. [Emphasis added]

Now, on the NIH (National Institute of Health) website, you find some more content from the article, including this key sentence:

Today’s racial and ethnic differences in children’s family experiences are striking. In 2014, 70 percent of non-Hispanic white children (ages 0–18) and roughly 59 percent of Hispanic children were living with both of their biological parents. The same was true for only a little more than one-third of black children.

Those numbers were striking to me. Why?

Because the Inman article above states:

According to the most recent Census information, homeownership among African American stood at 44 percent. The homeownership rate for white Americans, meanwhile, stands at 73.7 percent.

Is it mere coincidence that 70% of non-Hispanic white children were living with both of their biological parents, and white homeownership rate was 73.7%, while only 33% of black children were living with both biological parents and the black homeownership rate was 44%? I mean, the correlation is nearly perfect.

The authors of the Future of Children study then get into some data:

At the same time, racial and ethnic differences in marriage are striking. The median age at first marriage is roughly four years higher for black than for white women: 30 versus 26 years, respectively, in 2010. At all ages, black Americans display lower marriage rates than do other racial and ethnic groups (see table 1, panel A). Consequently, a far lower proportion of black women have married at least once by age 40. Our tabulations of data from the U.S. Census Bureau’s American Community Survey for 2008–12 show that nearly nine out of 10 white and Asian/Pacific Islander women had ever been married by their early 40s, as had more than eight in 10 Hispanic women and more than three-quarters of American Indian/Native Alaskan women. Yet fewer than two-thirds of black women reported having married at least once by the same age.

In addition to later age at first marriage and lower proportions ever marrying, black women also have relatively high rates of marital instability (see table 1, panel B). At nearly every age, divorce rates are higher for black than for white women, and they are generally lowest among Asian and foreign-born Hispanic women. Recent demographic projections suggest that these racial and ethnic gaps in marriage and marital dissolution will continue growing. [Emphasis added]

Now, you’re likely wondering what the point of this is. So African-Americans don’t marry as early or as often as whites, Asians and Hispanics. So what?

The Urban Institute Study

Well, according to this report from the Urban Institute on the State of Millennial Homeownership, we find these striking paragraphs:

Delayed marriage had the most significant impact on millennial homeownership. Being married increased the probability of owning a home 18 percentage points, after accounting for other factors, such as age, income, race and ethnicity, and education.

The marriage rate among young adults dropped from 52 percent in 1990 to 39 percent in 2015. If the marriage rate in 2015 had been the same as it was in 1990, the millennial homeownership rate would be about 5 percentage points higher. [Emphasis in original]

Read that again: delayed marriage had the most significant impact on Millennial homeownership.

If that’s true for Millennials (of all races), why wouldn’t it be true for African-Americans? Not getting married = not buying a house.

The Significance: Connect the Dots

The final step here is to look at what Pew Research has found regarding American attitudes towards marriage. You can start with this article, titled, “Record Share of Americans Have Never Married.” In it you find this amazing prediction:

Today’s young adults are slow to tie the knot, and a rising share may end up not getting married at all. According to Pew Research projections based on census data, when today’s young adults reach their mid-40s to mid-50s, a record high share (25%) is likely to have never been married.

Looking at cohorts of young adults ages 25 to 34 going back to 1960, there has been a steady increase since 1970 in the share that remains never married by the time the cohort reaches ages 45 to 54.

In 1960, some 12% of adults ages 25 to 34 had never been married. After 10 years, when that group was between the ages of 35 and 44, 7% of them still hadn’t wed. By 1980, when they were in their mid-40s to -50s, only 5% had still never married. The next cohort starting in 1970 followed a similar trajectory. However, each new cohort of young adults since then has had a higher share of never-married members than the cohort that came before it. If current trends continue, 25% of young adults in the most recent cohort (ages 25 to 34 in 2010) will have never married by 2030. That would be the highest share in modern history. [Emphasis added]


So we have black homeownership at the lowest point since the passage of the Fair Housing Act. We have black marriage rates trailing white marriage rates by quite a lot. The gap between black and white homeownership nearly mirrors the gap between black families and white families raising biological children. Then we have Millennial homeownership rates far below other generations. And we have Millennials not getting married at the rate of GenX and Boomers.

Seems like the evidence fits.

We All Know This

Fact is, we don’t talk about it very much, but everyone in the residential real estate industry kind of knows this and sort of assumes it. Think about what every agent is told by every broker: life events like marriage, births, deaths, etc. drive home transactions.

And it just makes eminent sense. A young couple would be perfectly happy renting that sweet 1BR apartment in the City, living that free single-ish life, going out to nightclubs with their friends, restaurants, theaters, sporting events, whatever. Then they get married. Suddenly, they’re now thinking about having a family. They don’t want to raise a baby in that tiny apartment above some late night pizzeria.

Marriage drives homeownership. That’s a truth we all kind of understand, even without reading through the Urban Institute study.

Of Course, Racism DOES Exist

Now, I’m not saying that low marriage rates are the sole reason why African-American homeownership rate is at historic lows. Of course racism exists; the Long Island investigation more or less proved that. Of course there is a strong correlation between economic class and race in America; how could there not be after our history of racism, segregation, redlining, and such?

So NAR’s efforts to combat racism and discrimination, and to put forth action items to really drive Fair Housing as a core value of REALTORS, are truly welcome.

But in 2020, when racism has been banished from polite society, there may be another factor that is more important to all of us: lack of marriage. African-Americans are merely the canary in the coalmine, because their marriage rates fell precipitously compared to other races, and did so earlier.

And now that lack of marriage thing is all over the Millennials and the Gen-Z generations, of all races. American attitudes towards marriage are changing. Social stigma against being unmarried, or even having children out of wedlock, are disappearing if it isn’t already completely gone.

There is literally nothing that the industry could do about this issue. It’s not an issue of Fair Housing, or racial discrimination. It’s an issue of young men and women simply choosing not to get married… until they find themselves in a situation where they can’t get married, even if they wanted to.

Now why that might be is a whole different topic, which I talk about at some presentations. (I will be touching on this at OREA’s Reality 2020 conference in Niagara Falls in a couple of weeks.)

Do Better on Race, Yes, But Pay Attention to Bigger Picture

The point is that as an industry, we need to do better on race. There’s no question about that. Real Estate might not be the whitest industry in America — pretty sure NASCAR and NHL have us beat — but it’s not exactly diverse. Not yet. It’s getting there, but like with all things real estate, slowly… oh so slowly.

But while we’re trying to deal with Fair Housing, racial steering, and the like, don’t lose sight of the underlying factor that has far greater implications for all of housing: lack of marriage in younger generations.


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Rob Hahn

Managing Partner of 7DS Associates, and the grand poobah of this here blog. Once called "a revolutionary in a really nice suit", people often wonder what I do for a living because I have the temerity to not talk about my clients and my work for clients. Suffice to say that I do strategy work for some of the largest organizations and companies in real estate, as well as some of the smallest startups and agent teams, but usually only on projects that interest me with big implications for reforming this wonderful, crazy, lovable yet frustrating real estate industry of ours.

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1 thought on “African-American Homeownership Lowest Since 1968: What If It’s Not All Race?”

  1. The most compelling data should come from the pre-recession, 2004-2007 time frame. Everyone was encouraged to get a loan, nobody was avoided. There are other factors at work. Anyone with experience in analytics knows how much weight is in socio-psycho-cultural and other qualitative variables in determining outcomes. You could say, its prejudice that the Eskimo population by percentage isn’t perfectly represented in the housing market, but it is not the racism of the stakeholders: The Realtor wants to make a commission, the mortgage broker wants his basis points, the builder wants a homeowner, the only color that matters is green.
    Glen Kelman is obviously just pandering. If he really cared, he’d substantially look at why some groups of people who are disproportionately renting don’t have sufficient savings and credit and work to solve these problems. In doing so however, it would reveal problems with origins not so PR friendly. He knows its not whats true that matters, its whatever the flavor of the month is. It’s easier to say Redfin will hire more transgender people in wheelchairs and cash out on the stock increase. As the saying goes, if you go woke you will go broke, but he’s not going to be CEO forever. This kind of theater is full of contrivances. It is patronizing to people in marginalized groups. Its insulting to pretend to care but not enough to have a difficult conversation that will make real change happen. If I couldn’t get a loan, I’d be condescending to lower your standards and blame it on anyone other than myself. I’d want to be told to get my shit together and save some money. I’d want to be treated like everyone else.

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