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Non-white households need 36.4 years of savings to buy a home in SF, says study

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Compared to 22.7 years for white residents

San Francisco Skyline Photo by Justin Sullivan/Getty Images

Wherever you live in the U.S., white people are more likely to own homes and have an easier time saving money for a down payment. That’s what rental site Abodo discovered when it sifted through U.S. Census estimates about American home ownership rates, racial demographics, and income brackets for a study published Tuesday.

These findings are not surprising at face value. The Census consistently finds white Americans are usually privileged enough to have higher incomes on average than other demographics, so naturally they’re more likely to buy homes.

What is shocking, however, is what happens when this conventional wisdom collides with home prices in the Bay Area.

Abodo examined the most recent American Community Survey (reflecting data from 2016) and found that nationwide 71.3 percent of primarily white households own homes, compared to 46.1 percent of non-white households.

(In this context, “non-white” means those who identify themselves on the census as Asian, American Indian, Hispanic, African American, and “other indigenous groups.”)

In San Francisco, 46.3 percent of non-white households own homes, virtually interchangeable with the national average.

But that might change in the future, since Abodo also calculates that, at modern SF prices, it takes a non-white household roughly 36.4 years to save up for a down payment.

Photo by Jerome LABOUYRIE

By contrast, the average white San Franciscan can afford the same place after 22.7 years.

The calculations assume a 20 percent down payment on a $1.12 million home and that a household can put 15 percent of its annual income toward saving for a mortgage. Note that the $1.12 million figure is a touch low for the city, on account of the census figures also include Oakland and Hayward.

That’s the worst gap in the country except for San Jose/Santa Clara County, where the white/non-white disparity is an incredible 38.5 years over 56.7.

Note that Abodo also points out that home values are different (ie, lower) for non-white households, meaning that different demographic groups are unlikely to be buying the same homes, and comparing how long it takes each to afford a median price risks simplifying things a bit.

Still, the ramifications of the figures are disconcerting. Consider, it takes a non-white San Jose household 1.47 times as long to save up a down payment, versus 1.48 times as long in, say, El Paso Texas (one of the cheapest home markets in the country, with a median home value of less than $100,000) or 1.36 times as long in Dayton, Ohio.

(The San Francisco ratio is 1.6.)

In a place like El Paso that gap adds up to a difference of 2.2 years, a difficult but potentially surmountable burden. But adding in the extra factor of Bay Area home prices transmutes essentially the same disparity into a span of 14 to 18 years instead.

By which point, of course, the down payment will actually cost even more.