Reflecting broader demographic transformation across the United States, the landscape of homebuyers is becoming increasingly diverse.
Data issued earlier this month by Redfin tracked mortgage originations over the past five years, and found a marked decline in the percentage of White Americans securing new mortgages, while minority groups — Hispanic, Black, and Asian buyers — have seen an increase.
Last year, White homebuyers secured 62.2% of all new mortgages, reflecting a continued decline from 64% in 2022 and 70.4% in 2018.
Conversely, Hispanic homebuyers accounted for 14% of new mortgages, up from 12.6% in 2022 and 11% in 2018. Black homebuyers represented 8.7%, showing an increase from 7.1% in 2018, and Asian buyers saw a steady rise, securing 8.2% of mortgages, up from 6.4% five years earlier.
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According to Elijah de la Campa, a Senior Economist at Redfin, homeownership is becoming more feasible for minority groups as the racial wage gap, while still large, is shrinking.
“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,” de la Campa said in Redfin’s analysis.
Over the last five years, the median annual income for Hispanic Americans surged 40.2% to $69,000, outpacing the growth for White Americans, whose median income increased by 31% to $86,000. Similarly, Black and Asian Americans saw increases in their median incomes, rising to $54,000 and $114,000 respectively.
At the same time, America is becoming more diverse.
According to the latest census data, White Americans now represent 59.5% of the population, a decrease from 61.6% in 2018 and 69.7% in 2000. The trend is even more pronounced, compared to 1970, when 84.1% of the population was White.
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In contrast, Hispanic Americans have grown to 18.8% of the population, up from 18% in 2018 and just 4.1% in 1970. Similarly, Asian Americans have increased their demographic share to 5.9%, and individuals identifying as two or more races are now 3.6% of the population.
“Much of this loss is attributable to the continued aging of the white population,” Brookings Institution senior fellow William Frey said in a census report. Fewer births and more deaths resulted in a natural decrease (more deaths than births) for the 2010s decade, even before the COVID-19 pandemic.”
To that end, shifts in who is buying homes can also be attributed to an increasing proportion of Hispanic, Black, and Asian Americans entering their prime homebuying years, traditionally defined as ages 25 to 34.
For example, 21.1% of Hispanic Americans are in the prime buying age bracket, showing an increase from 20.6% in 2018 and 16.5% in 2000. Similarly, 13.7% of Black Americans are now within the age range, up from 13.4% in 2018.
The proportion of Asian Americans in their prime homebuying years has also risen to 7% from 6.9% in 2018. In contrast, the percentage of white Americans in the demographic has declined to 54.4%, down from 56.6% in 2018 and 64.1% in 2000, indicating a broader aging trend within the group.
The most notable change has been in the homeownership rates, which, although historically skewed towards white Americans, are seeing a gradual leveling.
The homeownership rate among white Americans has somewhat stagnated, while homeownership rates among Hispanic, Black, and Asian Americans have shown increases, narrowing the racial homeownership gaps.
The gap between Black and white homeowners had decreased from 32.1 percentage points in the first quarter of 2019 to 28.3 percentage points in the first quarter of 2024, while the gap between Hispanic and white homeowners dropped from 25.8 to 24.1 percentage points, and the gap between Asian and white homeowners reduced from 16.3 to 11.8 percentage points during the same period.
Those changes indicate a slow — but steady — move towards greater equity in homeownership across racial lines.
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This article Minority Homebuyers Gaining Ground In Mortgage Market As White Share Declines originally appeared on Benzinga.com
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