Communities of Color Experiencing Faster Home Price Growth

Home buying myths shattered.
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A recent DSnews report highlights information and research on home values in communities of color. Within the past year, home prices have spiked rapidly. According to the Joint Center for Housing Studies analysis of Zillow’s data, price appreciation is more intense in communities of color. Despite a faster price growth in communities of color, home prices decline disproportionately. Alexander Hermann and Thomas Shay Hill, Joint Center for Housing Studies (JCHS) authors, stated “Behind this higher-than-average growth lies a more complex story: Even while this was happening, prices were also more likely to fall in communities of color”. Analysts utilized Zillow’s numbers to determine that median home values rose 8% in December 2020, which is a 4% increase from the year before. One-third of zip codes had a price growth of 8% or more, including more than half of zip codes that are communities of color. Compared to less diverse zip codes, communities of color had a higher home prices increase. The report included that the rapid increase was not geographically confined and communities of color experienced more variations in price appreciation. JCHS authors wrote, “while typical home values have risen fastest on average in communities of color since the start of the pandemic, prices also continued to fall in many of these neighborhoods”.              

WHAT ELSE DID ANALYSTS REVEAL?

The analysts found that roughly between 6% and 13% of tracked neighborhoods experienced decreases in home prices in any given month during the pandemic. Home prices declined in 6% of all zip codes and 7% of communities of color in December. This also includes 12% of majority-Black neighborhoods. In addition, JCHS examines home prices that were very low compared to the peaks reached in the mid-2000s. JCHS reported, “Of the 18,000 zip codes where Zillow has home price data going back to 2004, roughly one-fifth had typical home values below the peak of the mid-2000s. Among communities of color, over a quarter had prices below last decade’s peak. The rate is even higher—36%—among the 616 communities that are majority Black. This partly reflects a more severe downturn in prices in communities of color following the crash”. Moving forward, stagnating home prices and price volatility combined with the challenges faced by communities of color, creates barriers in building wealth. Researchers emphasize the importance of recognizing and analyzing these complexities in regards to addressing housing equality.

Click here to read the full DSnews report.

Click here to read the full JCHS report and learn more!

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