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36 | M R EP O RT 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 ORIGINATION How Increasing Diversity is Expected to Impact Homeownership A group of researchers examined four states with very different racial compositions, forecasting a wide range of possible homeownership trajectories in the coming decades. F or decades the rate of homeownership among Black, Latinx, Asian, and other minority demo- graphics lagged far behind the rate among White Americans. That is due to a history of structural barriers. This report comes a few days after HUD Secretary Marcia Fudge announced goals for her department to "fully realize the promise of fair housing." The Urban Institute has found that even though those home- ownership rates will continue to lag, demographic changes alone suggest that over the next two decades, the net growth in homeowners will be solely among families of color, according to re- search associates Lauria Goodman and Zun Zhu. That said, changes in household and homeowner composition will look very different across states. The Institute's "state fact sheet" series offers detailed statistics and projections about future house- hold formation and homeowner- ship for each of the United States. Breaking it down to more digestible analysis, UI is taking a look at four states with very dif- ferent racial and ethnic composi- tions and, its researchers expect, a wide range of possible homeown- ership trajectories over the next two decades. Those sample states include Texas, Georgia, California, and Minnesota. " Texas has the highest share of Hispanic families in the nation; Georgia has the highest share of Black families; California has the highest share of families of Asian descent as well as fami- lies that are not white, Black, or Hispanic and the second-highest share of Hispanic households; and Minnesota has mostly white households.," explain the research associates before going into fur- ther detail on each region. Texas: The number of house- holds in Texas is expected to increase from 10.1 million to 13.2 million, 31.5% compared with the national average of 12.4%. Households in the Lone Stat State were very diverse in 2020, accord- ing to Institute researchers: 48% White, 13% Black, 32% Hispanic, and 6% Asian and other. "By 2040, we project Texas will be even more diverse: 38% of households will be White, 15% will be Black, 38% will be Hispanic, and 9% will be Asian and other households." Georgia: Institute research- ers project the number of new Georgia households will increase from 3.9 million to 4.8 million, a 21.5% increase. "In 2020, Georgia was com- posed of 56% white families, 31% Black families, 7% Hispanic families, and 5% Asian and other families, the researchers report. "By 2040, we expect Georgia to be more diverse: 47% of families will be White, 35% will be Black, 10% will be Hispanic, and 8% will be Asian and others." California: The number of California households is expected to increase from 11.5 million to 13.2 million, a 7.3% increase that's much lower than the national average of 12.4%. It is one of the most diverse states, UI shows. "Even though the Hispanic and Asian populations will grow as a share of California's popula- tion from 2020 to 2040, the share of Hispanic households living in California is expected to fall from 23.1 to 19.5 percent, and the share of Asian and other households is expected to decline from 25 to 22% because the state is experiencing below-average household forma- tion growth." Minnesota: The overall home- ownership rate in Minnesota is high (71.9%) because of the high White homeownership rate (77.6%), but the Black homeowner- ship rate is among the lowest in the nation (21.0%). This is the larg- est homeownership gap between White and Black households in any state. Urban Institute: "We expect this gap to narrow dramati- cally over the next 20 years, from 56.6 percentage points to 49.3 percentage points, as the Black homeownership rate increases 8.6 percentage points. The number of net new homeowners will be more than 200,000: 40,000 of them White, 50,000 of them Black, 40,000 of them Hispanic, and 70,000 Asian and others." Again, the institute has detailed intel and projections for every state and they say, "The housing industry and state and federal policymakers need to be aware of these trajectories so they can pre- pare for and support homeowners of all races and ethnicities."