Redfin Report

The Pool of People Taking Out Mortgages In America Is Becoming Less White

(NASDAQ: RDFN) —The share of U.S. mortgages taken out by white homebuyers has declined over the last five years, while the share taken out by Hispanic, Black and Asian homebuyers has ticked up. That’s according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage.

The report is based on a Redfin analysis of 2018-2023 Home Mortgage Disclosure Act (HMDA) data covering mortgage originations for primary homes. This analysis does not cover originations for investment properties or second homes.

Just under two-thirds (62.2%) of new mortgages issued in 2023 went to white homebuyers. While that’s a far higher share than any other group, it’s down from 64% in 2022 and 70.4% in 2018. It’s also now more in line with the country’s demographics, as 59.5% of the U.S. population is white (as of 2022, the most recent year for which data is available).

Meanwhile, the share of new mortgages taken out by Hispanic buyers increased to 14% in 2023 from 12.6% in 2022 and 11% in 2018. Black buyers represented 8.7% of new mortgage holders last year—little changed from 8.6% in 2022 but up from 7.1% in 2018. Still, these figures lag demographic trends, as 18.8% of the U.S. population is Hispanic and 12.2% of the population is Black.

Asian buyers took out 8.2% of new mortgages in 2023, unchanged from 2022 but higher than the 6.4% rate in 2018. Asian mortgage holders are tracking slightly ahead of demographic trends, as 5.9% of the U.S. population is Asian.

All in all, people who are Hispanic, Black, Asian or two or more races took out 37.8% of new mortgages last year, up from 36% in 2022 and 29.6% in 2018.

“The pool of homebuyers taking out mortgages is becoming less white because America is becoming more diverse, and many people of color are in their prime homebuying years,” said Redfin Senior Economist Elijah de la Campa. “The racial wage gap, while still sizable, has also been shrinking. That has made homeownership more feasible for some Black and Hispanic people, though they’re still significantly less likely to own homes than white people.”

Hispanic, Black and Asian People Have Seen Larger Income Gains Than White People

The median annual income for Hispanic people in the U.S. was an estimated $69,000 in 2023, up 40.2% from 2018. That’s much larger than the gain for white people, whose median income rose 31% to an estimated $86,000. Black and Asian people also saw bigger increases in estimated incomes, which climbed a respective 34.7% to $54,000 and 36.4% to $114,000.