Are Diverse Neighborhoods More Expensive to Live In?

This is the second part of a two-part series on America's most diverse neighborhoods.

Do Americans want to live in diverse neighborhoods – or are they avoiding them?

We looked at changes in both occupied households (based on U.S. Postal Service data, just as in our recent post showing suburbs growing faster than urban areas) and home prices (based on homes for sale on Trulia) in the past year, comparing diverse neighborhoods, defined as those where no racial or ethnic group accounts for more than 50 percent of the population, and other neighborhoods. The more diverse neighborhoods have both higher population growth and stronger price growth in the past year – and they’re a bit more expensive to begin with:

Americans, therefore, are moving toward diverse neighborhoods. However, growth in those neighborhoods could affect their diversity: if prices in diverse neighborhoods rise, lower-income residents may get priced out over time. Because the two largest minority racial/ethnic groups – blacks and Hispanics – have lower incomes, on average, than whites, rising prices could reduce diversity in those markets. When the next Census rolls around in 2020, the list of most-diverse neighborhoods in the U.S. could look very different.

Technical note: the 2010 Census asked two questions about race and ethnicity: one about Hispanic or Latino origin, and one about race. The official Census race categories are white; black or African American; American Indian or Alaska Native; Asian; Native Hawaiian or Other Pacific Islander; and some other race. People can select more than one race. People of Hispanic or Latino origin can identify as any race.

We follow the convention of many demographic researchers and create racial/ethnic categories that do not overlap. "Hispanic and Latino" and "two or more races" are both considered separate categories. Using this approach, the U.S. population is 63.7 percent white, 16.3 percent Hispanic or Latino, 12.2 percent black or African American, 4.7 percent Asian, 0.7 percent American Indian or Alaska Native, 0.2 percent Native Hawaiian or Other Pacific Islander, 0.2 percent some other race, and 1.9 percent two or more races.

In this post, for simplicity, we refer to each racial or ethnic category by the first name or phrase used by the Census: White, Hispanic, Black, Asian, and so on.

See this report for more on how the Census asks about and reports on race and ethnicity.

New York Metro Area

Los Angeles Metro Area

San Francisco Bay Metro Area

Washington D.C. Metro Area