Jelani Bayi, seen with her dog Dior, purchased this four-bedroom home in Detroit’s Rosedale Park neighborhood for $275,000 in 2021. Like many majority-black areas, her ZIP code has recently seen big gains in As the housing shortage intensifies and state and federal efforts to end bias in appraisals of Black-owned homes advance. (Valaurien Waller/Bridge Detroit)
Property values for Black homeowners are rising across the country, with some of the largest increases in states in the Midwest and South. This boon for black homeowners, after decades of declining property values, could help them close a racial wealth gap that has kept the American dream out of reach.
Home values increased an average of 84% in majority-black ZIP codes between 2016 and 2023, outpacing growth in white ZIP codes, where values rose 69%, according to a Stateline analysis of federal housing data. housing and the census.
A booming market during the COVID-19 pandemic, a market that is intensifying housing shortageand new state and federal efforts to combat appraisal bias could finally move Black homeowners a step closer to home value parity.
Morgan Williams, an attorney for the National Fair Housing Alliance, an advocacy group, cautioned that the push for fairer housing assessments was only just beginning. And he noted that even unbiased appraisals can perpetuate housing undervaluation by using past sales as a benchmark.
“There has been, during the pandemic, an increase in Black wealth. There may be general policy measures that can be attributed to this, but I think a lot of it will be more focused on the real estate market,” Williams said.
Recent search found that homes located in majority-black areas are more likely than those located in majority-white areas to be valued below purchase offers. The disparity remains high but has improved recently, according to federal statistics.
The Stateline analysis found that the increase in housing prices in majority-Black neighborhoods since 2016 is a major change from the previous 15 years.
Between 2000 and 2016, sales prices in majority-black communities increased 40 percent, compared to 48 percent in majority-white areas, and home values fell in more than a fifth of black ZIP codes.
Since 2016, however, home values have increased in every majority-black ZIP code tracked by the independent Federal Housing Finance Agency, and have on average outpaced the increase in white ZIP codes.
Stateline relied on this Federal Housing Finance Agency postal code data, which uses sales of similar properties – called matched pairs – to estimate price changes over time. U.S. Census Bureau estimates were used to find ZIP codes where most homeowners are black.
In Detroit alone, rising real estate prices in black neighborhoods have created nearly $3 billion in new wealth for black homeowners, according to one study. A University of Michigan study published in April. This study focused on the period 2014 to 2022, the decade following the city’s bankruptcy. Stateline analysis suggests the recovery extends well beyond Detroit, across the Midwest and…
