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Closing the Wealth Gap: A Review of Racial and Ethnic Inequalities in Homeownership
Abstract
Homeownership plays an important role in the socioeconomic well-being of Americans. Despite recent major losses in wealth due to the subprime market crash, home equity remains the largest source of wealth for the average American family. A marker of class status, owning one's home provides access to neighborhoods with the best schools, quality public services, and lowest crime. This article demonstrates that minorities have not had the same access to homeownership that Whites have, and this contributes to continuing socioeconomic disparities between Whites and minorities. This article explores the homeownership experience of Blacks – including African-Americans, Caribbeans, and Africans – Hispanics, and Asians in the United States relative to non-Hispanic Whites. Minorities rely heavily on homeownership and home equity as the key component of their wealth and remain less likely than Whites to hold alternative forms of investment such as stocks. The role that homeownership plays in perpetuating intergenerational wealth disparities between Whites and minorities is discussed as are challenges to minority homeownership such as the pervasiveness of risky mortgage products. Exploring the racial gap in homeownership is fundamental to understanding racial inequalities and formulating strategies and policies to help close such disparities. This article concludes with suggestions for future research.
... Because wealth deter mi nants are mul ti ple and vary by race, it is impor tant to con sider effect het ero ge ne ity (e.g., Levy 2019; Wodtke et al. 2016). Housing is an out sized com po nent of nonWhites' wealth (Kuebler 2013), so neigh bor hood effects through hous ing may be par tic u larly impor tant for racial and eth nic minor i ties. Alter natively, with the increas ing con cen tra tion of wealth (Saez and Zucman 2016) and larger pay off to homeownership among Whites (Krivo and Kaufman 2004), wealth ben e fts may be con cen trated in the most-advan taged neigh bor hoods, among Whites, or among homeowners. ...
... This study's fnd ings are unlikely to be unique to the NLSY79 cohort. Residential seg re ga tion remains pro nounced (Lee et al. 2014;Reardon et al. 2018), and homes are a key source of wealth (Kuebler 2013;Shapiro 2006). Thus, neigh bor hoods will con tinue to be an impor tant aspect of U.S. wealth inequal ity. ...
Do neighborhood conditions affect wealth accumulation? This study uses the National Longitudinal Survey of Youth 1979 cohort and a counterfactual estimation strategy to analyze the effect of prolonged exposure to neighborhood (dis)advantage from emerging adulthood through middle adulthood. Neighborhoods have sizable, plausibly causal effects on wealth, but these effects vary significantly by race/ethnicity and homeownership. White homeowners receive the largest payoff to reductions in neighborhood disadvantage. Black adults, regardless of homeownership, are doubly disadvantaged in the neighborhood–wealth relationship. They live in more-disadvantaged neighborhoods and receive little return to reductions in neighborhood disadvantage. Findings indicate that disparities in neighborhood (dis)advantage figure prominently in wealth inequality and the racial wealth gap.
... 18 Latino homeowners also face discrimination, higher costs and more difficulty related to securing credit, gain less equity in their homes, and other "challenges to healthy, sustained homeownership" comparable to White (non-Latino) homeowners, although Latinos face disparities that are less pronounced than are present in Black-White homeowner comparisons. 19 Targeting home repair assistance to areas such as the two identified in Wilmington, with high numbers of low-income Black and Latino homeowners, provides an opportunity to assist not only individual households but also, if the repair assistance is provided to sufficient scale, can have a positive impact on community-level conditions. ...
We review the extent of the need for home repair assistance for low-income homeowners in Delaware, and steps being taken to address this need. Delaware contains an estimated 25,000 homes owned by low-income households that need repair, of which an estimated 5,000 are in substandard condition. There is an estimated $96 million total cost associated with this home repair need, with eighty percent of this cost ($76 million) coming from the twenty percent (5,000) of these homes that are in substandard condition. In order to address this need for repair assistance, Delaware's three Habitat for Humanity organizations have designed the Statewide Healthy Homes Program, which centers on the intersection of health and housing. The vision of the Habitat for Humanity Statewide Healthy Homes Program is to increase capacity for home repair assistance across Delaware. Additionally, the program seeks to include partnerships with healthcare providers to ensure a holistic approach to home repairs, improving each resident's quality of life.
... Our descriptive data show that gifts are mostly received by (white) native Dutch. Yet, various migrant, ethnic and racial groups vary in their ownership rates and housing equity (Keister, 2004;Kuebler, 2013;Van Gent and Zorlu, 2020). This diversity in tenure, housing equity and transfers implies a variety of spatial outcomes. ...
This paper assesses the role of parental gifts in neighbourhood sorting among young adult homebuyers. We make use of high-quality individual-level registry data for two large urban metropolitan areas in the Netherlands. While previous studies have shown that young adults receiving gifts purchase more expensive housing, little is known about the role of gifts in where young adults buy. Our study finds that parental gifts flow into the housing market in a spatially-uneven way. Movers supported by substantial parental gifts are more likely to enter owner-occupied housing in high-status and gentrifying urban neighbourhoods compared to movers without gifts. This study shows that this can only partially be explained by household and parental characteristics and by the uneven distribution of housing values. The remaining effect suggests that parental gifts also play a role in trade-offs regarding spatial residential decision-making. The conclusion discusses the ramifications of our findings for debates on (re)production of class and intra-generational inequalities through housing, and provides avenues for further research.
... Existing theories and perspectives on income inequality range from classical economic ideas, which view inequality as a necessary component of economic growth, to more recent theories that highlight the negative impacts of inequality on economic outcomes, such as slower economic growth, reduced social mobility, and increased poverty [1][2][3][4]. This work will examine these theories and perspectives in detail, and provide an in-depth analysis of the various arguments and evidence of income inequality. ...
This work provides a comprehensive overview of income inequality, including its background, relevant data, and different theories and perspectives on the issue. The focus is to shed light on this complex topic and provide a deeper understanding of the various arguments and evidence regarding income inequality. Theories range from classical economics viewing it as a necessary component of growth to more recent perspectives highlighting negative impacts such as slower growth, reduced mobility, and increased poverty. The work will examine these theories in detail and provide an in-depth analysis.
... However, we propose potential explanations for this result. White adults may have more access to intergenerational wealth and other resources and supports, which may limit the negative impacts of housing insecurity on health (Avery & Rendall, 2002;Kuebler, 2013;Meschede et al., 2017, pp. 121-137). ...
Rationale
A large body of work demonstrates the impact of housing instability on health by exploring the effects of evictions and homelessness on psychological wellbeing of young adults and children. However, limited research leverages national longitudinal data to examine whether and how experiences of a range of housing insecurity events, rather than just eviction or homelessness, affect physical health among midlife and older adults.
Objective
The current study examines (1) prevalence of housing insecurity among midlife and older adults by age and race, (2) linkages between housing insecurity experiences and facets of physical health, and (3) age and race moderations on these effects.
Method
This study employs regression models to examine whether experiences of housing insecurity affect self-rated physical health and chronic physical conditions among midlife and older adults (N = 2598) leveraging two waves of the National Study of Midlife in the United States (MIDUS).
Results
Models revealed that housing insecurity experiences predicted poorer self-rated physical health and additional chronic conditions, even when controlling for previous physical health. Moderation analyses indicated that housing insecurity has a stronger relationship with chronic conditions among midlife adults as compared to older adults, and among Black adults as compared to white adults. These results suggest that experiences of housing insecurity leave adults vulnerable to compromised physical health, and that housing insecurity experiences may be particularly detrimental to the health of midlife Black adults.
Conclusions
This research adds to the extant literature by introducing a comprehensive measure of housing insecurity experiences, and contributes to a life course perspective regarding how housing insecurity can affect physical health. This research has implications for policy that addresses housing insecurity as a public health concern, especially in the aftermath of the 2008 recession and the economic and housing crisis caused by the COVID-19 pandemic.
... For example, the federal policy of redlining urban neighborhoods led directly to the creation of racially segregated, resource-poor residential areas (McClure et al., 2019;Zenou & Boccard, 2000); further, race-based barriers to homeownership prevented the accumulation and intergenerational transfer of wealth within Black families (Kuebler, 2013), contributing significantly to disproportionate impoverishment among African Americans to this day. As another example, a historical context for transphobia would name that the violent enforcement of the idea of binary gender identity is rooted within hegemonic Christian colonialism (Lugones, 2007;O'Sullivan, 2021). ...
Decades of social science data have illuminated how oppression and inequality on the macro levels of society can manifest as trauma and deprivation on the individual or micro level. However, clinical pedagogies within human services fields (social work, substance use disorder treatment, psychology, psychiatry) do not adequately reflect these advances. This creates barriers for service providers seeking to address socially-engineered trauma, i.e., trauma occurring in the context of oppressive macro structures such as white supremacist racism, neoliberal economic policies and cisgender-heteropatriarchy. Service provision that is structurally competent, on the other hand, exists at the intersection of macro and micro and offers both ethical and clinical advantages. Given its traditional focus on eliciting behavior change on the micro level, the therapeutic modality of motivational interviewing (MI) may not attract attention as a tool for addressing systemic social injustice. However, by integrating key elements of MI with SHARP – a framework for addressing oppression and inequality – new options for structural competence emerge. The resulting hybrid, Macro MI, offers tools to join with clients to assess the impact of structural oppression on individual problems, as well as to envision solutions that include macro systems change. Underpinning this approach is a belief that the collective work of tearing down and replacing the systems that create trauma is central to healing the wounds inflicted by oppression. Within Macro MI, activism, organizing and consciousness-raising are interventions to treat PTSD as well as tools for preventing trauma from occurring to other members of the community.
... In the literature of racial inequality, homeownership receives a significant amount of attention for its contribution to the racial wealth gap (Famighetti and Hamilton, 2019;Herbert et al., 2013;Kuebler, 2013;Markley et al., 2020). Unlike renting, owning a home is expected to provide stable housing that appreciates over time and may provide a financial cushion in times of economic recession. ...
In recent decades, the racial wealth gap has widened with extant literature reporting that Black and Latinx families hold fewer assets than white families. One such asset that receives substantial attention because of its wealth-generating principles is homeownership. Whereas intergroup homeownership inequalities are found throughout the literature, less is known about racialized inequality within groups. Latinxs provide a novel case for exploring how racialized homeownership inequality is structured within an ethnic group. Using data from the American Community Survey, we examine the odds of homeownership and predicted logged home values among Latinxs. We find that the association between race and housing outcomes varies substantially across Latinx groups. Drawing from theories of Latinx racial identity and the future of racial structures, we discuss the implications of our findings for understanding racial inequality among Latinx groups.
Access to homeownership is central to both wealth and ethno-racial stratification. Previous research demonstrates ethno-racial inequality in homeownership such as unequal treatment, steering, and the type of mortgage products offered to both minorities and communities of color alike. However, it is unclear how differences in down payment levels shape ethno-racial disparities in mortgage credit access. This paper draws on annual data from the Home Mortgage Disclosure Act (HMDA) from 2018 to 2019 to assess ethno-racial disparities in mortgage outcomes across varying down payment levels. I demonstrate that black and Latino borrowers are more likely to obtain a high-cost loan and be denied a mortgage across varying down payment levels compared to white applicants. The results for Asians are mixed. These trends are particularly true when examining mortgage denials as black and Latino applicants with a down payment greater than 20% of the home value are just as likely to be denied a mortgage as white applicants with a down payment that is less than 5% of the home value. Asians with the highest down payment level perform similarly as whites with a below average down payment level. Implications for ethno-racial stratification are discussed.
This article assesses the asset building of households that take part in shared-equity homeownership (SEH) models. The contribution of this article is a comparison of outcomes for households participating in shared-equity programs with other low- and moderate-income households who rent or own properties without restrictions on appreciation. We matched participants in SEH programs to households with similar characteristics from the Panel Study of Income Dynamics (PSID) over the 1997–2017 period. The findings indicate that in real terms, median SEH homeowners accumulated about $1,700 in housing wealth annually or around $10,000 during their holding period. This amount is lower than the $2,100 median annual gain in home equity experienced by similar PSID owners but statistically and economically significantly larger than the $16 in annual gain experienced by similar PSID renters. The findings provide evidence that households participating in SEH programs experienced positive, but modest, wealth gains that were slightly lower than those of homeowners in unrestricted units but substantially higher than those of renters.
Homeownership is an important symbol of a middle-class standard of living and residential assimilation in the United States. This study explores the rate of advancement into homeownership of immigrants, relative to native borns, in Southern California, a principal region of immigrant settlement. Application of a double cohort method enables longitudinal trends for immigrants, due to both aging and assimilation, to be distinguished from the cohort levels observable by cross-sectional techniques. Recent immigrants as well as young native borns are newcomers to the housing market and have lower attainment levels than earlier arrivals or older cohorts. Cohort trajectories are tracked from 1980 to 1990, adjusting for the influence of income, education, English proficiency, and marital status. Asian immigrants achieved extraordinarily high levels of homeownership soon after arrival, whereas Hispanic immigrants demonstrated sustained advancement into homeownership from initially very low levels.
This article explores the types of racial and ethnic identities adopted by a sample of 83 adolescent second-generation West Indian and Haitian Americans in New York City. The subjective understandings these youngsters have of being American, of being black American, and of their ethnic identities are described and contrasted with the identities and reactions of first-generation immigrants from the same countries. Three types of identities are evident among the second generation – a black American identity, an ethnic or hyphenated national origin identity, and an immigrant identity. These different identities are related to different perceptions and understandings of race relations and of opportunities in the United States. Those youngsters who identify as black Americans tend to see more racial discrimination and limits to opportunities for blacks in the United States. Those who identify as ethnic West Indians tend to see more opportunities and rewards for individual effort and initiative. I suggest that assimilation to America for the second-generation black immigrant is complicated by race and class and their interaction, with upwardly mobile second-generation youngsters maintaining ethnic ties to their parents’ national origins and with poor inner city youngsters assimilating to the black American peer culture that surrounds them.
This article presents prevalence data on four specific mental disorders in samples of 452 Cuban immigrants who arrived during the Mariel crisis and 500 Haitians who arrived at about the same time. The disorders are: Major Depressive Disorder, Anxiety Disorder, Alcohol Disorder, and Psychosis. Cubans had higher rates of disorder than Haitians at all levels of education and income, but only in the Cuban sample was the standard inverse relationship between socioeconomic status and rate of mental disorder observed. These and other results presented suggest no single theory can explain the relationship of immigration to the range of specific mental disorders.
This study investigates homeownership differences among twelve racial/ethnic groups using the Public Use Sample data (PUMS) of the 1980 census. The analysis draws inspiration from two broad approaches in the literature on spatial processes—one approach is labeled as “assimilation” and the other as “stratification”—and includes both individual-level and contextual determinants. The study identifies a number of differences among non-Hispanic whites, blacks, American Indians, and Asian and Hispanic groups in access to homeownership. Majority group members have the greatest probability of homeownership, net of compositional characteristics. They also are the most likely to be able to respond to the housing needs of married persons and households with children by buying a home, and they have one of the smallest disparities in ownership between persons of low and high income. Homeownership opportunities in the suburban portions of metropolitan areas have their greatest impact on majority group members, while minority homeownership is more responsive to the composition of the central-city housing stock. Nevertheless, for every group there is a strong correspondence between homeownership and various individual-level factors: age, household composition, socioeconomic position and language acculturation. The observed differences in ownership are substantially attenuated when group differences in some of these variables are controlled.