Homeownership data reveals widened racial gap for Black Minnesotans

DeKevia Cole’s family moved to Minnesota from Mississippi when she was a child, and her mother struggled to afford housing. The family bounced between living with others and in a shelter before renting in north Minneapolis. Last winter, Cole, who is Black, became the first homeowner in her family. “I’m paving the way for my siblings and children,” she said.

Minnesota’s homeownership rate has remained steady, with slightly more than 70% of all households owning their residences, since the 1970s. But the stability of that surface-level data hides dramatic variation among racial groups, particularly as they’re more narrowly defined. “When you take a closer examination, that’s when you see real disparities,” says Jeff Howison, senior research analyst at the Minnesota State Demographic Center.

Past reports on Minnesotans’ homeownership rates have found significant inequality among broad racial categories such as white, Black or African American and Asian. But new data from the 2020 Census, the Bureau’s most comprehensive effort to document detailed race, ethnicity and tribal groups, has allowed researchers to assess the nuances within those categories.

A recent report Howison created for the Demographic Center reveals differing homeownership rates between Dakota and Ojibwe people in Minnesota, for example, as well as between U.S.-born African Americans and those of newer African immigrants.

Howison also used the disaggregated data to analyze how homeownership rates for the detailed groups have changed over time. Some showed substantial gains in recent decades. For example, homeownership rates among Asian Minnesotans are closing in on those of white Minnesotans (who have the highest rates of any racial group, at 77%), with Hmong Minnesotans showing the largest increase.

But for other groups, disparities have worsened.

In Minnesota, the well-documented homeownership gap between Black and white Americans looks more like a chasm, and one that has dramatically eroded. While the national rate of Black homeownership has remained around 45% since the 1980s, for Minnesota’s Black or African American population, as well as that group’s U.S.-born subset, specifically, the rate has declined by double-digits during that period.

Cole is a member of that cohort who has defied the trend. But she says that being surrounded by renters gave her little knowledge about credit and mortgages until she took a first-time homebuyer class. Working with a mentor from the Minneapolis housing nonprofit PRG Inc., Cole made a gameplan to improve her credit score and save for a down payment.

Now that Cole has settled into her new home in north Minneapolis, she says she hopes others who are unfamiliar with homeownership can learn about its benefits. “The resources are not there for a lot of people in families like me,” she says.

Here are the Demographic Center report’s most notable findings, organized by broad racial minority groups, from the state’s most to least populous.

Before the Great Migration of African Americans from southern states to northern ones, beginning in the 1950s, Minnesota’s Black residents made up less than 1% of the state’s population. Today, that number has risen to about 7%.

But unlike any other broad racial minority group, these households have increasingly been living in rented housing. In 1970, the homeownership rate for Minnesota’s Black or African American households was 42%. That number has fallen to 26% in recent years, less than half the state’s overall homeownership rate of 72% and significantly lower than the 46% of Black or African American homeowner households nationwide.

Howison found substantial variation in homeownership rates within the category’s subgroups. Rates have been increasing for several newer African immigrant communities, including Ethiopians and Liberians. People of Somali descent make up the largest group of African immigrants in Minnesota, and their households have the lowest homeownership rates of any subgroup, at 12%. But that number has increased from essentially zero in the 1990s, when the first refugees of the Somali Civil War arrived in Minnesota.

The most striking trend among the detailed groups was the falling homeownership rate for U.S.-born Black Minnesotans, which dropped from nearly 40% in the 1980s to 28% in 2020.

Looking at Black or African American Minnesotans overall, Howison noted another alarming shift, revealed when homeownership rates are parsed by age. Back in 1990, homeownership rates generally changed for Black Minnesotans in the way they did for Minnesotans overall: Rates rose throughout the working years and then declined after retirement. (In upper age brackets, homeowners tend to move in with family, to rental housing, or other senior communities or group facilities.)

But in recent years, homeownership rates for Black and African American Minnesotans essentially plateau in the mid-40s age bracket. African Americans who are in their 60s are now no more likely to own their home than those in their 40s, despite having two decades’ worth of additional earning potential.

This suggests members of the Black working- and middle-classes have lost considerable financial stability, a trend that will have ripple effects on subsequent generations. “It tells us something about the larger economic conditions, and the larger paths that people travel over the course of their life, and those avenues for upward mobility,” Howison said. “You don’t have your house to potentially pass on to your kids, or to have that kind of generational wealth-building.”

While Minnesota’s Hispanic population has grown substantially since the 1980s, from 1% to about 6% today, the group’s homeownership rates have hovered around 50% throughout. The rates are similar for members of the largest group, Minnesotans of Mexican descent, and those of the next largest, such as Minnesotans of Puerto Rican descent.

Asian households in Minnesota have the highest rates of homeownership among racial or ethnic minority groups, at 64% in recent years. This reflects a significant increase from the 1980 rate of 44%. Rates for many subgroups, including Chinese and Vietnamese Minnesotans, made steady gains over recent decades, with Hmong Minnesotans showing the sharpest increase.

Hmong refugees began arriving in Minnesota in the mid-1970s, fleeing the Vietnam War’s devastation of their homeland in Laos and the subsequent communist takeover. In 1990, when fewer than 20,000 Hmong people lived in Minnesota, the group’s homeownership rate was slightly more than 10%. In recent years, with Minnesota’s Hmong population approaching 100,000, the rate has increased to about 60%.

One cohort of today’s Hmong homeowners presumably reflects the increased financial security of that initial group.

“The first generation arrives, and they get a little toehold,” Howison explained of immigrants’ finding employment and establishing social networks. “Then you have upward social mobility, and homeownership is a marker of that.”

Homeownership rates for American Indian and Alaska Native populations in Minnesota have ranged between 43%-51% since the 1980s, but there is variation between Minnesota’s largest tribes, the Dakota and Ojibwe. While Howison acknowledges that historic data, which was pulled from decennial censuses and American Community Surveys, has a greater margin of error for smaller groups, it showed that Ojibwe homeownership rates have remained steady, at about 50%, since 1980. Meanwhile, Dakota homeownership rates roughly doubled, from about 30% to 60%, since 1990.