{"id":63802,"date":"2018-09-07T03:00:23","date_gmt":"2018-09-07T10:00:23","guid":{"rendered":"https:\/\/redfindevelop.wpengine.com\/blog\/?p=63802"},"modified":"2020-10-19T16:06:49","modified_gmt":"2020-10-19T23:06:49","slug":"minority-home-equity-gains","status":"publish","type":"post","link":"https:\/\/www.redfin.com\/news\/minority-home-equity-gains\/","title":{"rendered":"Since 2012, Broad Home-Equity Gains Across Minority and White Neighborhoods"},"content":{"rendered":"

Minority Neighborhoods Had the Largest Percentage Gains in Home Equity<\/span><\/h4>\n

But Starting with More Equity, White Neighborhoods Had the Largest Absolute-Dollar Gains <\/span><\/h4>\n

Homeowners in white, minority and mixed-race neighborhoods posted substantial gains in home equity from 2012 to 2018. Minority neighborhoods started with the lowest levels of home equity but had the largest percentage gains. White neighborhoods had the lowest percentage gains in home equity, but the largest gains in absolute dollars. Meanwhile, the home-equity gap between white and minority communities widened to $94,000 in 2018. <\/span><\/p>\n

Average Home Equity and Equity Gains, 2012 – 2018<\/span><\/p>\n\n\n\n\n\n\n\n
<\/td>\nAverage Home Equity in 2012<\/span><\/td>\nAverage Home Equity in 2018<\/span><\/td>\nDollar Gain in Equity<\/span><\/td>\nPercentage Gain in Equity<\/span><\/td>\n<\/tr>\n
White Communities<\/span><\/td>\n$127,000<\/span><\/td>\n$348,000<\/span><\/td>\n$221,000<\/span><\/td>\n171%<\/span><\/td>\n<\/tr>\n
Minority Communities<\/span><\/td>\n$69,000<\/span><\/td>\n$254,000<\/span><\/td>\n$185,000<\/span><\/td>\n265%<\/span><\/td>\n<\/tr>\n
Mixed-Race Communities<\/span><\/td>\n$104,000<\/span><\/td>\n$311,000<\/span><\/td>\n$207,000<\/span><\/td>\n199%<\/span><\/td>\n<\/tr>\n
Overall<\/b><\/td>\n$99,000<\/b><\/td>\n$293,000<\/b><\/td>\n$194,000<\/b><\/td>\n197%<\/b><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

“Home prices over the last six years rose most steeply in minority communities, and unlike in past booms when Americans just borrowed more and more money, these price gains led to real increases in wealth for homeowners of color,” said Redfin CEO Glenn Kelman. “But even though homeowners in mostly minority communities had the largest percentage gains in home equity, it was the folks living in mostly white neighborhoods who had the largest dollar gains, just because they had so much more home equity at the beginning of the recovery. This just goes to show that, even as a strong market broadly benefits homeowners, it’s still very hard for people starting with less money ever to catch up. On an absolute-dollar basis, homeowners in minority communities became wealthier, but still fell further behind.”<\/span><\/p>\n

Our analysis is based on data on home values in white, minority, and mixed-race zip codes in the 16 most populous metropolitan areas for which Redfin tracks historical home-sale price data. To measure <\/span>home equity<\/span><\/a>, we used the <\/span>Redfin Estimate<\/span><\/a>, the automated home-value estimate with the industry\u2019s lowest published error rate for listed homes, as well as loan information from county records. We considered a zip code \u201cwhite\u201d if less than 25 percent of its households were not white, according to Census data as of 2016. We called a zip code a \u201cminority\u201d community if more than 50 percent of its households were African American, non-white Hispanic or Asian. We defined a community as \u201cmixed-race\u201d if between 25 and 50 percent of its households were not white. It\u2019s worth noting that the data we analyzed does not account for people who lived in but never owned homes in these communities. As home prices appreciated faster than wages, it\u2019s likely that many people became less able to buy homes in their neighborhoods, and have thereby been excluded from the wealth gains afforded by home-equity growth in the past six years. Read similar:<\/strong>\u00a0Redlining in Real Estate<\/a><\/span><\/p>\n

See the table below for local data on home equity and appreciation. Highlights include:<\/span><\/p>\n