Young Blacks are ‘bearing the brunt of the racial homeownership gap’
California’s affordability improved slightly for all ethnic groups in 2025, as home prices barely budged and mortgage rates slipped lower.
But among the better news is a big concern – Black and Latino households are falling behind Asians and whites in the ability to buy a home in California, according to the California Association of Realtors.
Only 11% of Black and Latino households could buy the median-priced home in the state, compared to 29% of Asian and 23% of white households. And the buying power dipped into the single digits in some counties, including Los Angeles, Alameda and Santa Clara.
It’s an about-face from just a few years ago, when more Black and Latino households could purchase, thanks largely to mortgage rates in the 2-3% range that helped offset fast-rising home prices.
Fewer than 1 in 5 households could buy a home in California
Overall, almost one of every five (19%) households could afford to buy a home in California, compared to 18% in 2024.
Better but not good, especially compared to the national rate of 40%. A record 56% of California households could buy in 2012, a peak reached following the housing market collapse that prompted the Great Recession.
For many Blacks and Latinos, buying a home is a challenge – and the difficulty depends on the market. But Latinos fare better in most markets.
For example, 13% of Latinos can buy a home in Alameda County, but only 7% of Black households. In Fresno, Sacramento and San Bernardino counties, the disparity is an alarming 8% between Latinos and Blacks.
Asian buyers easily outpaced the overall affordability figure in the 14 counties studied, including a 50% rate in Fresno and Kern counties (please see table, below).
Latinos prop up a sluggish housing market nationwide
Nationwide, more Black and Latino families can buy a home – 27% and 35%, respectively – but still lag the overall population, whites and the 56% rate for Asian households.
Latinos are among the fastest-growing ethnic group of buyers nationwide, with 441,000 Latino households buying a home in 2025. It’s the largest one-year increase in Latino homeownership, according to the U.S. Census Bureau. Without Latino buyers, the U.S. housing market would have experienced a decline of about 125,000 homes.
“Hispanics had a record year for both homeownership and household formation, while the broader U.S. housing market continues to struggle with affordability challenges,” said Gary Acosta, cofounder and CEO of the National Association of Hispanic Real Estate Professionals. “Latinos are driving demand and strengthening communities, while tight inventory, interest rates, and higher home prices are keeping many qualified families on the sidelines.”
In California, home prices double the national average are keeping Latinos and Blacks – and many others – from becoming homeowners. That could have a long-lasting economic effect, possibly for generations.
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Homeownership has been critical for building generational wealth, especially in cities with fast-rising home prices, such as the Bay Area and Southern California.
“For generations, homeownership has been one of the most powerful tools for building wealth that Americans have,” said Matt Schulz, chief consumer financial analyst for LendingTree. “Homeownership isn’t cheap, and there are ongoing costs; however, the equity that you can build over the years can be incredibly helpful. Not only can it provide you funding when you’re in a financial pinch, but it can also be used in working toward other financial goals.”
Think paying off credit-card debt, a college education or home-improvement projects.
‘A mountain that remains to be climbed’
For Blacks and Latinos, affordability and getting approved for a mortgage are the biggest hurdles, according to a LendingTree report.
More than one of every four (26%) Black applicants for a mortgage was denied in 2024, and 22% of Latinos. Those figures are almost double the denial rates of Asians and whites, according to the National Fair Housing Alliance.
That has created a huge wealth gap in the U.S., with white Americans controlling 84% of the wealth compared to 3.4% for Blacks.
And the gap could widen, especially since only 14% of Black Gen Zers and 32% of Black millennials own their home, about half the rate of whites for those generations, according to Redfin.
“Black millennials and Gen Zers are bearing the brunt of the racial homeownership gap; ever since they have reached homebuying age, the country has faced significant financial challenges and a major housing supply shortage,” said Darryl Fairweather, chief economist for Redfin. “Young Black Americans started out behind their white counterparts because they’re less likely to have property and family money, due to historical discrimination in housing and employment. Now, they are coming of age during turbulent economic times that have impacted Black workers more than white workers.”
The affordability challenges – largely the median home price – coupled with the denial rate for mortgages, often because of debt-to-income ratio issues, “illustrates just how high a mountain that remains to be climbed for Black Americans when it comes to building wealth and getting access to homeownership,” Schulz said.
In California, that mountain is among the highest in the nation.
Percentage of Californians who could buy
the median-priced home in 2025
| City | All | Whites | Asian | Black | Hispanic |
|---|---|---|---|---|---|
| California | 19% | 23% | 29% | 11% | 11% |
| Fresno | 35% | 43% | 50% | 21% | 29% |
| Los Angeles | 15% | 22% | 19% | 8% | 9% |
| Orange | 15% | 17% | 18% | 11% | 10% |
| Sacramento | 32% | 33% | 37% | 21% | 29% |
| San Diego | 17% | 21% | 23% | 11% | 11% |
| San Francisco | 23% | 26% | 21% | 13% | 18% |
Source: California Association of Realtors
