As of 2021, more than 70% of white households in America owned a home. That figure for Black households is only around 44%, according to the National Association of Realtors.

That Black homeownership rate actually ticked up during the first two years of the pandemic, with mortgage rates near historic lows. But since the Federal Reserve started raising interest rates, that momentum has slowed.

The foreclosure crisis of the late 2000s hit Black households especially hard. After reaching a peak in 2005, Black homeownership dropped and stagnated. But in 2020, those numbers started creeping up, according to Jung Hyun Choi at the Urban Institute. 

“There has been an increased share of younger Black homeowners during this period,” she said. “In 2021, about 54% of Black homebuyers were below age 45.”

Low mortgage rates lifted homeownership across racial and ethnic groups, but those rates have more than doubled since 2021.

That’s especially hard for Black homebuyers, who generally have less cash on hand for large down payments, Choi said.

“Those who put lower down payments are more sensitive to rate changes. So we would think on average Black homebuyers are more sensitive than whites,” she said.

While data for last year isn’t out yet, Vanessa Perry of George Washington University Business School fears what a prolonged period of higher rates could mean for Black homeownership and wealth building.

“To the extent that Black households are not homeowner households, that is the driver behind the colossal wealth gap,” she said.

And while mortgage rates have shot up, housing prices aren’t tumbling down.

Bryan Greene, vice president of policy advocacy at the National Association of Realtors, said that if he could choose one policy to fix the racial homeownership gap, it would be “building several million new houses throughout the United States.”

In the long run, boosting supply is the only way homeownership becomes more attainable for Black Americans, Greene added.