Urban Wire Adding 3 Million Net New Black Homeowners in the Next Decade Can Narrow the Widening Homeownership Gap
Janneke Ratcliffe, Jung Hyun Choi
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The Black homeownership rate has fallen since the Great Recession, and the Black-white homeownership gap has widened to levels greater than they were in 1968, when housing segregation was still legal. Although overtly racist lending practices are no longer allowed, their legacies persist in housing, contributing to a growing modern-day disparity.

If the Black homeownership rate is left unaddressed, the Urban Institute projects it will continue to fall for every age group younger than 85. As homeownership is key to building wealth, particularly for Black families, for whom homeownership makes up an even greater share of household wealth, this trend poses an economic risk for the nation and a disaster for the Black families unable to achieve homeownership and transfer wealth to their children.

The mortgage market depends on consumers who can access safe and responsible loans, so bold, innovative, and evidence-based solutions are needed to increase homeownership among Black households, strengthen the middle class, and grow the economy.

To do so, establishing a shared goal allows leaders across government, industry, civil rights, and economic empowerment to measure, affect, and define achievement. We believe that having 3 million net new Black homeowners by 2030 represents one such goal that stakeholders can take measurable steps toward reaching today.

Why 3 million net new homeowners?

In 2019, there were 42 million Black people in the US living in 15.4 million households. Among those households, 6.5 million owned a home, which is a homeownership rate of 42 percent. 

Adding 3 million net new Black homeowners means that 9.5 million Black households will own their homes by 2030, a goal that is easy to track and measure. Because the homeownership rate depends not only on how many households own a home but on the total number of households, it can fluctuate depending on the rate of household formation and changes in the size of the population. A homeownership rate–based goal reflects a confluence of factors and may be harder to interpret as a result.

The US Census Bureau projects that there will be 44.9 million Black people in the US by 2030. If the headship rate, the share of the population that is a head of household, and homeownership rate remain flat, there will be 16.4 million Black households and 6.9 million Black homeowners, an increase of 400,000 Black homeowners, accounting for population growth.

With the headship rate constant, adding 3 million Black homeowners will increase the Black homeownership rate to 57.5 percent. But if the headship rate increases to 40 percent, as our research projects, there will be 18 million Black households by 2030. In this case, 9.5 million Black homeowners mean a Black homeownership rate of 52.6 percent, just 2.9 percentage points below its 2004 peak.  

How Adding 3 Million Net New Black Homeowners by 2030 Will Affect the Black Homeownership Rate




Homeownership rate






Scenario #1: Assuming the headship rate stays constant





Scenario #2: Assuming the headship rate increases to 40%





Source: 2019 American Community Survey.
Note: The calculations include Black Hispanic homeowners.


Interventions are needed across three areas to add 3 million net new Black homeowners

No single solution will correct the historical inequity in ownership opportunity or remedy the malignancy of ongoing systemic racism in our housing markets. Instead, multifaceted frameworks and coordinated execution by a broad range of stakeholders are required. To achieve 3 million net new Black homeowners, we believe measurable interventions are required in three broad areas.

1. “Net new” means not losing further ground

Although adding new homeowners is the primary goal, efforts to retain and strengthen the nearly 6.5 million current Black homeowners are still needed. The Black homeownership rate climbed steadily from 1960 until the early 2000s before the Great Recession dealt a blow to Black households and communities who were disproportionately saddled with predatory loans and lost their homes at 1.8 times the rate of white borrowers (PDF). 

The COVID-19 pandemic has dealt another blow, leaving Black borrowers, many of whom never fully recovered from the Great Recession, more likely to be in forbearance or delinquent on their mortgages and once again at risk. Protecting these households requires rethinking mortgage loss mitigation approaches and redressing structural factors that depress the benefits of Black homeownership

2. Add new homeowners by fixing the systems that finance and supply housing

A growing number of Black households will be in active homebuying ages (ages 25 to 54) through 2030. These younger cohorts are less than half as likely to own their homes as their white counterparts, providing a key opportunity to boost the number of Black owning households. Before the pandemic, there were already 1.7 million mortgage-ready Black households younger than 40 in the nation’s 31 largest metropolitan areas and more than 3 million nationwide.

Increased outreach to would-be homebuyers and investments in housing counseling can help. But meaningfully expanding Black homeownership requires changes in access to credit and financial resources, including targeted down payment assistance programs, and innovations in mortgage credit scoring and mortgage products. Increasing the supply of affordable homes is also critical to increasing Black homeownership.   

3. Strengthen the foundation of fair housing and fair lending

Efforts to support existing Black homeowners and add new homeowners will require a strong federal and regulatory framework to address systemic discriminatory policies and practices that are unlawful barriers to housing opportunity. The roots of the Black homeownership crisis are well documented and include systemic racism, equity stripping, and a significant loss of both affordable housing and affordable mortgages. 

Multiple generations of explicit discrimination under federal law have compounded these effects, suppressing homeownership rates. Federal policies can also address the unique factors first-generation homebuyers face, including the lack of family down payment assistance and experienced advice from preceding generations of homeowners.

By acknowledging the contributing factors, including systemic racism, and identifying achievable, actionable goals, we hope to assist stakeholders in designing strategies that shrink the racial disparities in homeownership and increase homeownership opportunities for Black people still waiting to secure their piece of the American dream.

The Urban Institute has the evidence to show what it will take to create a society where everyone has a fair shot at achieving their vision of success. 

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Research Areas Housing finance
Tags Racial and ethnic disparities Homeownership Racial homeownership gap
Policy Centers Housing Finance Policy Center