A racial divide in home values

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The Rochester area ranks ninth worst in the nation in disparities between white and Black homeowners’ property values.

Homes in predominately white Rochester-area ZIP Codes are worth 321 percent more on average than homes in the city’s predominantly Black neighborhoods, a newly published report found. 

A joint project of the real estate data firm Clever and Dream Builders 4 Equity, a St. Louis, Mo.-based nonprofit that works with underserved youth, the April 26 report, “America’s Housing Inequality and the Racial Wealth Divide,” found that across the country homes in neighborhoods with predominantly minority populations are on average worth less than half of what homes in predominantly non-minority neighborhoods are worth. 

According to the study, the disparity between home values in mostly minority and predominantly white neighborhoods tops 100 percent in 38 U.S. metropolitan areas. The disparity in the 10 metro areas with the greatest divide ranges from 317 percent in Salisbury, Md. to 645 percent in Flint, Mich. 

The real estate firm and the nonprofit computed the racial home-value disparity by comparing average home values in various ZIP codes. In Rochester, the comparison was between an average value of $60,656 in predominantly Black neighborhoods and an average value of $255,403 in predominantly non-minority neighborhoods. 

In Erie and Niagara counties, the Buffalo-Cheektowaga-Niagara Falls area also made the 10-highest property value disparity list, ranked seventh highest with Black-owned homes with an average $74,839 value versus $350,361 for non-minority owned homes’ values.


The racial property-value disparity extends directly and indirectly to other areas, the study found. Home equity, for example typically accounts for nearly 30 percent of U.S. families’ net worth, so lower home values mean that Black families on average are poorer than white families by virtue of owning homes with lower market values. Citing the most recently compiled U.S. data, the study notes that the typical American Black family’s $12,780 in household wealth compares to household wealth of $139,300 for a typical white American family. 

Though Black Americans typically own homes that are worth less than their white neighbors’ homes, Black homeowners as a rule pay higher interest rates for mortgages. In 2015, the study notes, interest on Black borrowers’ mortgage loans averaged 29 basis points higher than rates charged on similarly situated white borrowers’ loans. 

Higher interest rates on mortgages often means that Black families spend more of their income on housing than white counterparts. In the St. Louis metro area, the study found, housing costs typically equaled 29 percent of Black homeowners’ income versus 18 percent for white homeowners. 

According to the study, the gap between Black and white U.S. homeowners’ property values has grown substantially over the last 13 years. In 2007, the difference between Blacks’ and whites’ average home prices was approximately $57,668. In 2020, the difference was $94,489. 

Will Astor is Rochester Beacon senior writer.

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