Mortgages in the U.S. are becoming 'less white'

The number of Hispanic, Black and Asian Americans taking out a mortgage is on the rise.

According to research by the real estate company Redfin, this reflects the fact that adults from these groups have secured larger pay rises than white people over recent years.

While 70% of those securing a home loan were white in 2018, this fell to 62% last year. That's more in line with U.S. demographics as a whole, as 59.5% of the population is white.

Meanwhile, Hispanic homebuyers represented 14% of new mortgages in 2023, compared with 11% five years ago. Home loans among Black consumers rose more modestly over the same period—from 7.1% in 2018 to 8.7% now.

While these figures show progress, there's more work to be done.

Redfin points out that mortgages among both groups still lag behind demographic trends. The latest data shows 18.8% of Americans are Hispanic, while 12.2% are Black.

Asian Americans are an exception to the rule here. While they represent 5.9% of the U.S. population, they accounted for 8.2% of new mortgages last year.

Redfin senior economist Elijah de la Campa said, "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."

The racial gap is narrowing

Although Black and Hispanic people tend to have a lower median income than their white counterparts, they have enjoyed a larger boost to typical earnings over the past five years.

Black Americans now have an estimated income of $54,000, a 34.7% rise from 2018. Meanwhile, the median annual income for Hispanic people stands at $69,000, up 40.2%.

Among Asian Americans, there's been a 36.4% bump to $114,000. By contrast, white workers have seen gains of 31% since 2018, leaving them with $86,000.

Redfin says a tight labor market is often good news for marginalized communities because it prompts employers to look for candidates outside of their networks.

Some states have also introduced increases to the minimum wage, disproportionately benefiting people of color.

The figures also reflect the fact that a rising number of Hispanic, Black and Asian consumers are now at the prime age to buy a property.

Overall, 74% of white people in the U.S. are now homeowners, with Redfin arguing this means "there's not a lot of room for growth." By contrast, 62.2% of Asian Americans are in a similar position—falling to 49.9% of Hispanic people and 45.7% of Black people.

"The pool of homebuyers taking out mortgages is becoming less white because America is becoming more diverse," de la Campa noted.