Like many first-time home buyers, Akisha Everett of Minneapolis spent months shopping for a house and being outbid by others. “I am holding my breath until I get the keys in my hand,” Everett said in the middle of the hunt.

As a black woman, making a winning offer wouldn’t be her only victory. The homeownership rate for black households in the Twin Cities is the lowest of the nearly 80 U.S. cities with minority communities large enough for comparisons, according to a new analysis of Census Bureau data.

Homeownership in the metro among black households has always been low. But in 2015 — the latest year for which data is available — it amounted to 23 percent, down from 29 percent a decade ago and far below the national average of 42 percent.

Milwaukee and other cities in the Midwest and California also have low rates, while cities in the South have high rates of black homeowners, according to the analysis, put together by the Associated Press.

The Hispanic homeownership rate in the Twin Cities also declined significantly to 38 percent over the decade, while the rate for white households dipped only slightly and, at 75 percent, remained one of the highest in the nation.

The racial gap in homeownership is another reflection of disparities between white and nonwhite incomes in Minnesota, a division that has also grown in recent years. In 2015, white households in Minnesota reported an average income of $67,000 compared with $30,300 for blacks and $43,400 for Hispanics, according to census data.

“Lack of income is the biggest issue,” said Julia Israel, a real estate agent and productivity coach at Keller Williams Integrity Lakes in Minneapolis and a member of the Minnesota Association of Realtors board of directors.

The problem has enormous potential to shape the region’s economic future. Statistically, all the population and job growth in the Twin Cities this decade will be among people of color. One of three Minnesotans born from the mid-1990s to the mid-2000s, the oldest of whom are now entering the workforce, are minorities.

Low unemployment and near record-low mortgage rates are now helping shore up homeownership rates, and rising house prices are helping bolster the wealth and stability of homeowners. Minority families, however, aren’t participating in the recovery at the same pace as white families.

Jeff Washburne, executive director of the City of Lakes Community Land Trust (CLCLT), a nonprofit that helps low-income families buy houses, said that while the price rebound is good for neighborhoods, it’s making the situation more difficult for those who want in on the recovery.

“There continues to be great desire for low-income households to do better for themselves and their families,” said Washburne. “But [there are] very few paths that they can take to achieve it, few policies to support it and even fewer resources to bridge the difference between what households can afford and the cost of housing.”

Black and Hispanic neighborhoods in Minneapolis became the epicenter of the foreclosure crisis in 2007 and 2008 after unscrupulous lenders targeted buyers in those communities with risky subprime loans that often came with high-interest or adjustable-rate mortgages that made homeownership unsustainable. At the peak of the 2008-09 recession, entire city blocks in parts of north Minneapolis were riddled with foreclosures, causing house values to plummet and leaving former owners with shattered credit.

Israel, the real estate agent, said there are still traces of discriminatory housing policies in some communities, leaving would-be buyers without the kinds of social connections that can put homeownership more within reach.

“As an industry we can do a better job,” she said. “People don’t know where to go to get accurate info about homeownership, and they get discouraged by the first ‘no’ and don’t know where to go after that.”

The problem goes back decades, starting with restrictions on where black people could buy a home. Later, a practice known as redlining made it difficult for minorities to get a mortgage in communities deemed to be a financial risk.

With the Twin Cities housing market churning at a near-record rate — 2017 sales are neck and neck with last year’s peak — the homeownership gap issue isn’t capturing much attention. Real estate executives are more focused on trying to address a broader shortage of entry-level houses.

The situation is all the more vexing for minority buyers with little or no credit. That’s because lenders have made it much more difficult to qualify for a mortgage, aiming to avoid the risky lending that helped fuel the recession.

With the minority population on the rise, the market opportunities are enormous. Waterstone Mortgage, which has several offices in the Twin Cities, recently hired a regional vice president of retail production who speaks Spanish and partnered with the National Association of Hispanic Real Estate Professionals to help train its loan officers and processors.

And Wells Fargo Home Mortgage, the national lender that has key operations in the Twin Cities, recently announced a $60 billion lending commitment aimed at increasing homeownership rates among African-Americans, including a goal of creating at least 250,000 African-American homeowners by 2027. It is spending $15 million on financial education and counseling over the next 10 years to connect with people like L’Tanyua Littlejohn, who lived in public housing for several years.

When Littlejohn decided this summer to buy a house, her network of friends and family didn’t include anyone in the real estate or mortgage business. So she asked her smartphone.

A Google search helped connect her with Powderhorn Residents Group, a housing counselor and financial literacy class. A nursing assistant, Littlejohn had decent credit, and she starting saving $100 a month for a down payment.

Her counselor put Littlejohn in touch with the CLCLT, which has helped more than 300 low-income families in the Twin Cities buy houses by retaining ownership of the land under a particular property, then selling the home on that land to an income-qualified buyer. Washburne said more than half of those 300 deals have involved minorities.

On her income, Littlejohn qualified for a $100,000 mortgage and is buying the first house that captured her heart: a 748-square-foot home in Minneapolis with a fenced-in yard and her own laundry machines.

“At this stage in my life I just want peace and a place for my son and grandbabies to come visit,” she said. “It’s a little tiny yellow house, but it fits me to a T.”

For Everett, a mother of two, the house-buying process took a lot longer and was far more complicated. At a time when lenders are extra cautious, qualifying for a mortgage on a house with enough space for her sons wasn’t going to be easy.

For seven months, she watched her spending and made sure she paid her bills on time, which boosted her credit rating.

The search for a house took nearly as long. Entry-level houses are the most in demand and tightest in supply in the Twin Cities these days. Everett visited more than 50 and made offers on some, including one that was more than $15,000 over asking price.

She lost them all until late April, six months after she began looking, when she made an offer on a brand-new three-bedroom house in north Minneapolis that was on the market for $190,000. After an inspection in May, the deal closed in June. She and her sons moved in this summer, boosting their economic prospects — and the region’s.

“I have always dreamed of owning my own home,” she said. “I think that it is important to start to create generational wealth for my children.”


Data editor MaryJo Webster contributed to this report.