Mortgage rates near three-year low are helping to boost homeownership rates for black and Hispanic Americans, the National Association of Home Builders said in a blog post on Friday.
The minority homeownership rate rose to 48.3% in the third quarter, up almost a percentage point from a year earlier, the post said. The 0.9% gain was higher than the 0.4% increase in the overall U.S. homeownership rate, which rose to 64.8%.
“Lower mortgage rates (at a three-year low) and a healthy job market have helped to make homeownership more affordable,” the post said. “These factors are most likely contributing to the recent upticks in the overall and minority homeownership rates.”
The average U.S. rate for a 30-year fixed mortgage declined every month of 2019 until ticking up eight basis points in October. The average was 3.69% last month, rising from a three-year low of 3.61% in September, according to Freddie Mac data. The higher rate seen in October is still more than a percentage point below the 4.83% in October 2018.
Breaking down the minority homeownership rate, the Hispanic rate gained the most in the third quarter, with a 1.6 percentage point increase to 47.9%, NAHB said.
The black homeownership rate posted the second-largest gain, up 0.8 percentage point to 43.3%. It was the largest gain in the black homeownership rate since the third quarter of 2017.
“It is important to note that this quarter’s gain stands in contrast to five out of the six prior quarters, going back to the 1st quarter of 2018, which were marked by significant declines in the black homeownership rate,” NAHB said.
The rate for black Americans fell to 40.6% in 2019’s second quarter, the lowest level ever recorded in the Census Bureau’s quarterly data going back to 1994. It was the lowest rate for black households since the 1950 decennial Census when it was 34.5%.