Black First-Time Homebuyers Are Purchasing Real Estate Despite Affordability Challenges Nationwide, Zillow Report Finds

 

Although rising market costs are driving up real estate prices nationwide, Black first-time homebuyers remain committed to homeownership.

A new Zillow research report published Feb. 20 revealed that Black first-time homebuyers are playing a significant role in driving a rebound in the housing market, despite ongoing challenges with affordability. While the national percentage of first-time homebuyers has dropped from 50% last year to 44% this year, Black first-time buyers have shown a remarkable and steady increase.

From 2019 to 2021, Black first-time buyers saw a decline in their share, dropping from 47% to 35%. However, this trend reversed in 2022, with Black buyers making up 55% of first-time purchases. By 2023, that number surged to an all-time high of 63%, and in 2024, Black first-time buyers continued to lead the charge at 62%, outperforming all other racial groups.

The growth in Black homeownership is significant in the context of affordability struggles faced by many in the market. Zillow’s findings show that while affordability remains a major barrier, Black homebuyers are navigating it with resilience. Only 17.6% of listings are within reach for a typical Black household, compared to 37.9% for white households. Despite these challenges, Black buyers have found ways to increase their presence in the housing market, with certain cities offering more opportunities than others.

 

Where is it affordable for Black first-time home buyers to purchase?

If you’re a first-time homebuyer looking to purchase property in the US, St. Louis might be the ideal place to start. According to Zillow, St. Louis has emerged as the most affordable housing market for Black households earning the median income, with 30.3% of listings falling within reach.

St. Louis excels in affordability, with a median home price of $215,000, according to Redfin. Other cities that closely follow St. Louis in affordability include Birmingham (29.5%), Memphis (29.0%), as well as Baltimore, Pittsburgh, and Detroit, which has a median listing price of $100,000, Realtor.com notes. These cities have become key destinations for Black buyers seeking more affordable housing options, helping them navigate the challenges of rising home prices.

Another key factor contributing to the rise in Black homeownership is the growing flexibility of remote work. Black renters are 29% more likely than other renters to be in a position where homeownership could become attainable if remote work were an option. This shift allows for greater mobility, enabling Black individuals and families to access more affordable housing markets that were once out of reach due to proximity to expensive urban centers.

Zillow’s innovative tools are also helping potential buyers navigate these challenges. The “Buyability” tool offers personalized estimates of what buyers can afford using real-time mortgage rates, helping them better plan for homeownership. With continued support and access to affordable housing markets, Black first-time buyers are making strides in a market that remains difficult but full of promise for those determined to own a home.

SEE ALSO:

Top 10 Cities In America With The Largest Black Homeownership Gap

Middle-Class Black Homeownership In Atlanta Is On The Decline. Here’s Why