Minority homeownership in Maine lags the rate for whites with Black home buyers less prevalent here than in most other parts of the country, a national study released Wednesday found.
The homeownership rate for whites in the state was 73 percent in 2019, some 43 percentage points more than Black people at 30 percent, according to the National Association of Realtors’ analysis of U.S. Census Bureau data. Hispanic homeownership in Maine was 55 percent and Asian-American ownership was 77 percent. All racial ownership percentages in Maine were higher than the nationwide averages except the rate for Black people, which was 12 percentage points lower than nationally.
The low ownership rates filter down to financial status. The association said homeownership contributes to wealth accumulation, and because the homeownership rate is lower in minority groups, their net worth is lower. At $188,200, the net worth nationwide of a typical white family was nearly eight times greater than that of a Black family in 2019.
Minority groups are a small portion of the overall population in Maine, which is registered alongside Vermont among the nation’s whitest states. More than 94 percent of Maine residents were white as of July 2019, according to the U.S. Census Bureau. Another 1.7 percent were Black, 1.8 percent Hispanic and 1.3 percent Asian.
Maine’s residential housing market saw record sales during the pandemic, fueled by low interest rates and an influx of out-of-state buyers. Sales for last year were up by nearly 10 percent compared to 2019 at 19,921 homes, according to the Maine Association of Realtors. Values rose almost 14 percent to a median sales price of $256,000. The median sales price indicates that half of the homes were sold for more and half sold for less.
That led to a buildup of home equity wealth. Nationwide, homeowners last year increased their wealth by about $1 trillion, said Lawrence Yun, the chief economist at the National Association of Realtors.
But first-time homebuyers, many of whom are minorities, have been disproportionately affected by job losses during the pandemic, he said. That, along with rapidly rising home prices, is pricing them out of the market.
“For Black Americans, in general, the greater likelihood of having student loan debt, combined with lower household incomes and accrued savings when compared to the national average, adds to the challenge [of homeownership],” he said.
The association said President Joe Biden’s proposed first-time buyer tax credit of up to $15,000 may help narrow some of the disparities between races.
Some 43 percent of Black people nationally had student loan debt of about $40,000 compared to 21 percent or white households carrying an average of $30,000 in student loan debt.
Black mortgage loan applicants also were rejected for mortgage loans more than twice as often as white applicants. That led more Black people to pay cash and tap into their retirement or pension funds as a down payment on a loan.
Discrimination also figures into home purchases. Some 41 percent of Black respondents to the association’s study said they faced stricter requirements because of their race and one-third said they experienced discrimination with the type of loan product offered.
About seven in 10 white Americans bought a home in a neighborhood with a majority of whites. One quarter of Black, Hispanic and Asian-American buyers did the same.