More Black and Latino Consumers Experience Obstacles in the Homebuying Process

More Black and Latino Consumers Experience Obstacles in the Homebuying Process

Many consumers, especially those of color, are interested in improving their financial situation
Latina reviewing finances

Although many things have changed for millions of Americans during the COVID-19 pandemic, some things have stayed the same — particularly when it comes to the homebuying process and the financial challenges it poses.

In its 2021 Housing & Financial Conditions survey, housing nonprofit NeighborWorks America discovered that, although 62% of Americans own a home today, many roadblocks on the path to homeownership remain for the country's less privileged.

Compared to 62% of US consumers, only 53% of Latino adults and 42% of Black adults own a home. This disparity is only compounded by the fact that 61% of Latino adults and 63% of Black adults don't think a bank or credit union would approve them to buy a home.

Black and Latino adults experience more financial roadblocks to homeownership than white adults

NeighborWorks America found that, of those who have experienced pandemic-related financial challenges, 73% predict it will take six months or more to recover while another 46% say it will take a year or more to do so.

As a result, many Americans are focusing more on more immediate necessities rather than long-term savings goals. Specifically, respondents' top financial priorities include:

  • Paying everyday expenses (51%)
  • Saving for future expenses (21%)
  • Saving for an emergency fund (14%)
  • Paying down debt (14%)

But even though most consumers agree that right now is a bad time to buy a home, 36% of respondents are still looking for a new place to live.

Still, the road to homeownership is a long one, and people of color have a harder time navigating the financial obstacles along the way than their white counterparts do. For instance, NeighborWorks America revealed that:

  • 69% of Black adults and 71% of Latino adults use a checking account, compared to 78% of total Americans
  • 51% of Black adults and 63% of Latino adults own and use a credit card, compared to 66% of Americans
  • 49% of Black adults and 60% of Latino adults have either personal financial investments or a work retirement account, compared to 70% of Americans
  • 41% of Black adults and 39% of Latino adults have had their financial applications denied or delayed because of their credit scores compared to 31% of Americans
  • 70% each of Black non-homeowners and Latino non-homeowners don't know their credit scores at all, compared to 77% of Americans

People of color want to improve their financial situation in the months ahead

NeighborWorks America's data on the financial challenges experienced by would-be homeowners of color may explain why many of them are now seeking additional knowledge and resources to help them achieve their goals.

A different survey from Chase found that Black and Latino consumers are ahead of the general population in improving their credit as well as starting a new business or side hustle. Similarly, Black respondents (66%) and Latino respondents (56%) are more interested in taking classes to improve their financial situation than the general population (50%) as well.

And although 58% of all non-homeowners want more information on the homebuying process, Asian non-homeowners (81%) and Black non-homeowners (68%) are especially interested in this information.

In particular, non-homeowner respondents said they would like to learn more about:

  • Cost, fees or affordability information (24%)
  • Home or neighborhood information (13%)
  • The homebuying process and how it all works (12%)
  • Loans, including the process, financing or related information (10%)

Methodology: NeighborWorks America conducted an online survey of a demographically representative base sample of 1,000 adults ages 18 and up between April 19-28, 2021. Another three oversamples were gathered (about 200 respondents each) for Asian, Black and Latino adults.

Oversamples and the total sample were weighted to Census targets for age, education, employment, gender, household income, region, race and ethnicity.