Realtors have reported that black millennials are fueling an increase in home buying among African Americans in 2020.
Both the National Association of Realtors and the National Association of Real Estate Brokers are attributing a large part of African Americans' home buying in 2020 to black millennials looking to purchase their first house.
National Association of Realtors economist Lawrence Yun said: "Without a doubt, African-American Millennials are participating in this home-buying surge. The fact that Black home [purchases] are much higher now compared to before the pandemic is quite a surprise."
Black millennials driving home buying
Yun explained that the increase in black millennial home buyers is another demonstration of the US' K-shaped economic recovery, wherein many people who were doing well prior to the pandemic and were able to keep their jobs are actually thriving amidst it.
She mentioned that some of these people were able to deposit their federal stimulus payments into savings accounts.
A November analysis from the National Association of Realtors revealed that 5% of Americans who made house purchases during the first three quarters of 2020 were black, increasing by 1% over the same period in 2019.
However, US Census data showed that the cohort of black millennials actually increased the home ownership rate for all African Americans by more than two percentage points over the same period.
Black millennials are currently taking advantage of the record-low mortgage rates due to the additional income and reduced personal spending brought upon by the health crisis.
Trend analysis and outlook
According to realtors and economists, this home buying trend among black millennial will continue in 2021.
Baltimore realtor JoAnne Poole, broker manager at Berkshire Hathaway Home Services Homesale Realty, said: "We've already seen indicators of more houses starting to come on the market, more people being aggressive."
Several factors are prompting black millennials to purchase homes, including the pandemic, low mortgage rates and a new cultural emphasis on wealth building among African Americans.
Members of this cohort, who have credit scores and income levels that make them suitable mortgage applicants, are looking to buy houses in markets where owning a home costs less than renting.
Poole claims that her company's sales increased by 12% year-over-year and that black millennials' purchases are up by around 2% compared to last year.
Meanwhile, Ennis Antoine of Berkshire Hathaway Home Services Georgia Properties, claims that business has not been this good since prior to the 2008 market crash. He mentioned that house sales went up by 30% in the Atlanta area and that the majority of his clients are black millennials earning annual salaries of $80,000 and above.
Antoine said: "They're saying, 'Let me invest in myself, buy while I can.'"
However, realtors and economists warned that black millennials who purchased houses in 2020 do not represent the majority of African Americans, whose economic standing have worsened this year due to the pandemic.
Jung Hyun Choi, a research associate at Urban Institute, pointed out that prior to this year, economists were worried that black millennials would not buy homes due to their disproportionate rates of student loan debt and other systemic inequities.
Choi argued that economists are now concerned about laid off black homeowners who may soon face bank foreclosures.
