Examining Housing Affordability by Race

A new National Association of Home Builders study using data from the association's Housing Opportunity Index finds that homeownership is much less affordable for blacks, Hispanics and Native Americans. Courtesy of Tenafly New Jersey Real Estate

A new paper by National Association of Home Builders economist Rose Quint examined differences in housing affordability for different racial and ethnic groups. Using data related to the NAHB / Well Fargo Housing Opportunity Index (HOI), the report found stark difference among various population groups.

HOI was launched in the first quarter of 1991 and has been published quarterly during the past 20 years. The national HOI is defined as the share of all homes sold in the country in any given quarter that were affordable to a family earning the national median income.

Similarly, metropolitan area/division HOIs indicate the share of homes sold in a particular area that were affordable to families making the area's median income.

The new analysis examined median incomes and housing affordability for Whites, Blacks, Hispanics, Asians and American Indians/Alaska Natives. HOI for all race/ethnic groups combined was 72.8 in 2010, meaning that 72.8 percent of all homes sold in the U.S. last year were affordable to families earning the national median income of $64,400.

In comparison, median family income was $69,000 for Whites, $42,300 for Blacks, $44,100 for Hispanics, $80,500 for Asians, and $43,200 for American Indians/Alaska Natives.

Thus, 80.3 percent of homes sold in 2010 were affordable to families earning the median income for Whites, compared to 53 percent for Black, 51 percent for Hispanic, 76.4 for Asian, and 58.7 for American Indian/Alaska Native median family income.

- Courtesy of NAHB