The racial home ownership gap is wider now than in 1960, but a growing number of first-time Black homebuyers has emerged

By Kevin Haas
Rock River Current
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ROCKFORD — Felicia Parham kept her eye on the housing market for years before she decided she could no longer wait on the sidelines.

The 41-year-old mental health therapist became a first-time homebuyer on Feb. 11, closing on the purchase of a three-bedroom, two-bathroom home in central Rockford.

She said escalating prices and an expectation mortgage rates weren’t going to return to their sub 3% level any time soon pushed her to move now.

“I felt like with the market being that is, the increase of home prices in my opinion would only get worse,” Parham said. “I just felt like now was the time to strike while the iron is hot. I didn’t see home (prices) getting any lower.”

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Parham is part of a growing number of Black homeowners who are buying for the first time, according to new data reported this week by Zillow. It shows that 62% of Black homebuyers bought their first home in 2024, rising 27 percentage points since 2021 after a sharp drop amid the coronavirus pandemic. Comparatively, first time homebuyers make up 44% of the overall market, down from 50% in 2023, according to Zillow’s data.

The rise in first-time Black homebuyers is significant because the gap in the home ownership rate between Black and white families is higher now than it was when it was legal to refuse to sell someone a home because of their race, religion or national origin. That gap threatens to exacerbate racial economic disparity if not closed, real estate and advocacy groups say.

The gap between white and Black home ownership stood at 28.2 percentage points in 2022, according to the most recent American Community Survey data. The gap was 27 points in 1960, eight years before the Fair Housing Act prohibited discrimination in housing.

The most recent data shows Black home ownership stands at 44%, up about 2 percentage points in the past decade. But the gains were higher among other racial groups in that time period, according to data from the National Association of Realtors. White home ownership stands at 72% and it’s at an average 65% for all races. The gap widened because Black families on average didn’t benefit as much from the economic recovery after the 2008 financial crisis, according to an analysis by the Urban Institute.

The uptick in Black home ownership is small but an important positive trend, said Conor Brown, CEO of the NorthWest Illinois Alliance of Realtors, which highlighted the data in its most recent monthly report.

“This increment, though slight, signifies a positive movement toward home ownership within the Black community,” he said. “And a new influx of more Black Realtors in the Rockford market, both younger and female, may change those opportunities.”

Home ownership is considered a key factor in both personal financial gain and generational wealth for families.

“They’re trying to create (generational wealth) for their families, because maybe they didn’t have it growing up. Now they definitely see the importance of it moving forward in life,” said Felicia Esmond, a Realtor with Dickerson & Nieman who is one of just about two dozen Black Realtors in Boone, Winnebago and Ogle counties.

There is an estimated total of 25 total African-American Realtors out of 999 total in the three-county region, making up 2.5% of the area’s Realtors, according to the NorthWest Illinois Alliance of Realtors.

Esmond, who is Parham’s Realtor, said she seen local evidence of the uptick in Black homebuyers, including several sales this year.

“It’s definitely increased,” Esmond said. “I think they’re seeing the value of paying their mortgage versus paying someone else’s mortgage.”

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Reversing the gap in home ownership, advocacy groups such as the Urban Institute say, will involving addressing housing supply issues, an equitable finance system and outreach to mortgage ready renters.

“Despite affordability challenges, Black first-time home buyers are demonstrating a strong commitment to home ownership, a key driver of generational wealth,” Orphe Divounguy, a senior economist for Zillow, said in this week’s report. “While income disparities and saving difficulties continue to delay home buying for Black households, programs like down payment assistance, first-time buyer tax credits and flexible lending options have helped increase access.”

Parham, even with her research of the market and the support of her parents and her Realtor, said the leap to buy a home was still scary. But she trusts it was the right move at the right time.

“I’m scared as hell, but I serve a God that is bigger than all my fears and anxieties so I totally put my trust in him,” she said. “I smile every day when I wake up knowing this is mine, something I will keep and have forever.”

This article is by Kevin Haas. Email him at khaas@rockrivercurrent.com or follow him on X at @KevinMHaas or Instagram @thekevinhaas and Threads @thekevinhaas