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52 | M REPORT O R I G I NAT I O N S E R V I C I N G DATA G O V E R N M E N T S E C O N DA R Y M A R K E T THE LATEST DATA Midwest Cities are Busting the Urban-Flight Myth While it's true that more people are leaving New York and San Francisco than arriving, the same can't be said for all major metros. T he suburbs may be red hot when it comes to the real estate market, but the data shows that urban areas may be white-hot. Zillow reports that metropolitan areas in the Midwest, which tend to be less expensive than the surrounding suburbs, are busting the urban exodus myth to pieces. While it's true that more people are leaving New York and San Francisco than arriving, the same can't be said for cities in the Midwest region. For the last several months, urban home values have been growing faster than those in the suburban areas including St. Louis, Cincinnati, Cleveland, Kansas City, Columbus, and Indianapolis. "The for-sale housing market is experiencing a pandemic-fueled surge in both urban and subur- ban areas," says Alexandra Lee, Zillow Economist. "Home has become more important than ever, and buyers are eager to hit the market to find their next place to live, many newly freed from their commute and suddenly finding themselves in need of more space for a home office or gym. More often than not, buyers are flocking to homes in affordable areas and pushing up prices." More expensive housing markets do show more growth in the suburban areas. New York; Washington, D.C.; Atlanta; Boston; San Francisco; Seattle; and Denver all experienced stronger home value growth outside of the cities during parts of 2020. However, on a national level, things are even when it comes to big cities versus the surrounding areas. In fact, Zillow web traf- fic for urban areas matched or exceeded suburbs when the entire country was taken into account. And when it comes to home val- ues, they grew at nearly identical rates—urban homes went up 8.8% and suburban homes went up 8.7%. When it came to renting, the cities and the suburbs tell a differ- ent story. Suburban rent swelled 5.2% from 3.8% during 2020, while urban rent fell to 1.5% from 3.6%. Zillow economists suspect the drop in urban rent may be due to the three million Americans who moved back in with their parents during the pandemic. Mostly from Generation Z, they're the age that tends to live in urban rentals. With the implementation of COVID-19 vaccines and the reopening of the economy, they're expected to return to the cities. All in all, the trends we're seeing now will most likely continue into the year. Race and Homebuying Snapshot A study examines the homeownership trends among each racial group over the last 10 years. B lack Americans are more than twice as likely to be saddled with student loan debt and turned down for mortgage loans than their white counterparts, accord- ing to the National Association of Realtors (NAR). Minorities—and Black Americans in particular—are con- fronting obstacles in their pursuit of homeownership, accord- ing to the "Snapshot of Race and Homebuying in America" report from the National Association of Realtors. At 42%, the homeownership rate for Black Americans is almost 30% below that of white Americans, which stands at 69.8%. The U.S. homeownership rate sits at 64.2%, with the rates for Asian and Hispanic Americans at 60.7% and 48.1%, respectively. At 43%, Black households are more than twice as likely as white households, 21%, to face student loan debt. Meantime, Black applicants received a thumb's down for mortgage loans at a rate of 2.5 times greater than their white counterparts—10% vs. 4%, respectively. Nationally, the typical home is within the financial reach of 43% of Black households and 63% of white households, 71% of Asian households, and 54% of Hispanic households, according to the study. While more than 60% of Black households have the means to buy a home in Alaska, Kansas, Nebraska, South Dakota, and Vermont, less than a third are able to so in California, Colorado, Hawaii, Massachusetts, Montana, Nevada, Oregon, Utah, Washington state, Wyoming, and the District of Columbia. Meantime, in California, Hawaii, Oregon, and Washington state less than half of white households are in a position to purchase a home, while more than half of Asian households can do the same in all but six states—California, Colorado, Hawaii, Montana, North Dakota, Wyoming—and the District of Columbia. NAR's researchers report that policy proposals such as the Biden administration's first-time buyer tax credit of up to $15,000 would help address many of these underlying problems. "Under the proposal, homebuyers would receive the tax credit when making the home purchase, rather than having to wait until filing federal income taxes the following year. NAR also believes the first-time buyer tax credit should be accompanied by incentives to create more affordable housing units to prevent the credit from further aggravating the current shortage."