The media is rife with coverage of the nation’s housing crisis, as it should be. The median new home price in February was $400,500, interest rates hover just under 7 percent, and the minimum income required to afford the median priced home is now $106,000, up 80 percent from $59,000 in 2020.
Marriage cuts the rate of the homeownership gap by more than half.
The crisis affects all Americans and carries long-term consequences: less wealth accumulation, declining living standards, intergenerational inequality, and, perhaps most worryingly, reductions in new household formation and births. Elementary schools are closing across the country as the population of children aged 0–5 years old has dropped from 25.2 million in 2010 to 22.5 million in 2022.
Nevertheless, media reports present the housing crisis through the narrow crucible of race, a sterling manifestation of America’s incorrigible racism. (READ MORE from Seth Forman: Why Are We Having Less Sex?)
The hook that allows for this tendentious diversion is the racial “homeownership gap”: 45 percent of blacks own homes, compared to 73 percent of whites. This allows the Guardian, for example, to report that prices are out of reach for all, but, “[g]iven that the value of a homeowner’s property makes up a significant chunk of their net worth … not owning a home has left many Black Americans behind.”
A Bloomberg report in February also sees the crisis in narrowly racial terms, titling its coverage “Housing Affordability Near Record Low Hits Black Buyers Particularly Hard,” while a CNN report bemoans “the gap between Black homeownership rates and that of any other race or ethnic group is even larger now than in 2011.”
For all of their handwringing over the homeownership gap, these outlets make no serious effort to uncover its causes, leaning lazily instead on the antiquated postwar shibboleths of discrimination in lending and more frequent loan denials for blacks. CNN even digs up the specter of “redlining,” a practice outlawed decades ago in which lenders refuse loans to certain (presumably black) neighborhoods.
But in an age in which Asian mortgage applicants have a higher approval rate than whites, and black-owned banks turn down black applicants at higher rates than white-owned banks, it is difficult to believe that discriminatory practices in real estate account for a significant portion of the homeownership gap. As the Manhattan Institute’s Steven Malanga points out, the racial homeownership gap was smaller in 1960, before the passage of major civil rights laws such as the 1968 Fair Housing Act and the 1977 Community Reinvestment Act.
For those not blinded by a political agenda, logic suggests the racial homeownership gap is a consequence primarily of demographics and other less malevolent forces.
At the most basic level, purchasing a home is a major lifecycle event closely associated with those over a certain age, and blacks, on average, are more likely to be below that age than whites. With the existing median age of 44 for whites and 34 for blacks, there is simply a higher percentage of black people under the 35-year-old median age for first-time homebuyers. According to the U.S. Census, an estimated 42 percent of whites are under the age of 35, compared to 51 percent for blacks. Roughly 9 percent of the 28-percentage-point homeownership gap can be explained by age differences alone.
But the crucial factor is marriage. The need for space and privacy doubles when it comes time to house two people rather than one — and in today’s market, a second income is almost always a necessity for affordability.
Today, approximately 59 percent of all first-time homebuyers are married, and among married couples, the homeownership rate is around 80 percent. In short, marriage increases the chances of homeownership considerably, and blacks are less likely to be married than whites.
According to the 2020 American Community Survey, 30 percent of blacks were married, compared to 52 percent of whites. Indeed, half of all blacks have never been married, compared to 28 percent of whites.
The marriage disparity is even greater for those in their 30s, the primary first-time homebuying age. Only 16 percent of black women in their 30s are married, versus 58 percent of white women.
In fact, marriage cuts the rate of the homeownership gap by more than half: Among married blacks, the homeownership rate is around 64 percent, compared to the overall white rate of 73 percent.
The unhappy irony is that the marriage gap between whites and blacks exploded at almost the exact moment when the 1968 Fair Housing Act gave unprecedented enforcement powers to the federal government. As late as 1970, 94.8 percent of white women were married, compared to 92.2 percent of black women. As one study found, up through 1960, “age at first marriage and the proportion of women ever married were similar among whites and blacks.”
“Thus,” the authors note, “the racial divergence we see now in marriage formation is relatively recent.”
These demographic differences by themselves would appear to explain the bulk of the racial homeownership gap, but there are other differences that also portend lower homeownership for blacks as compared to whites.
While a majority of people of all major racial and ethnic groups live in suburbs (the places most characterized by single-family homeownership), blacks are still more likely to live in central cities, locations with high-density zoning where homeownership is less likely for all. In 2020, approximately 46 percent of blacks lived in central cities, while only 24 percent of whites did.
Small behavioral differences between racial groups can also matter for homeownership. It is true, as the Bloomberg piece cited above points out, that blacks are less likely to have equity in an existing home to help with downpayments. (READ MORE: Why White Ethnics Left Newark)
But it is also true, as economist Robert Cherry points out, that blacks generally save less than whites, even as a percentage of income. Economic studies have found that lower-income blacks spend “up to 30 percent more than whites of comparable income on visible goods like clothing, cars, and jewelry.” Author Cora Daniels, in Ghettonation: A Journey into the Land of the Bling and the Home of the Shameless, excoriates blacks in the U.S. for wasteful spending and attributes it to the prevalence of “short-term” time horizons among many blacks and an unwillingness to delay gratification.
None of this obviates the prohibitive obstacles once placed before blacks in the housing market or the particular hardship housing poses for all those with less income or familial wealth. But it makes little sense to expect whites and blacks to have equal homeownership rates when, to paraphrase one writer, the median white American is 44 and married, and the median black American is 34 and single.
The good news is that people of any racial group can have more weddings.
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