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Title: How Did the Housing Bust Affect the White-Black Homeownership Gap?

Citation Type: Miscellaneous

Publication Year: 2013

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Abstract: This study documents the changes in the distribution of the white-black homeownership gap over the housing bust period of 2005 through 2011. Our analysis shows that the housing bust did not a ffect the homeownership gap uniformly. In fact, we fi nd that the gap decreased for households that were the least likely to own and remained unchanged for households that were most likely to own, and that medium likely to own black households were especially vulnerable to the crisis. Contrary to the popular press's focus on the role of predatory lending among minority households, we fi nd that the contribution of racial di fferences to the residual gap (which potentially captures any discriminatory practices) was modest. Overall, the changes in the total racial gap over the sample period are substantively explained by changes in wage income, interest dividend and rental income, marital status, and length of residence, with the extent of their respective influences varying over the homeownership distribution. Our empirical approach reveals distributional information on the determinants of the changes in the homeownership gap at the household level. Such insights have valuable policy implications that would otherwise be concealed in analyses that look only at the conditional mean.

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Authors: Fesselmeyer, Eric; Le, Kien T.; Seah, Kait Y.

Publisher: National University of Singapore

Data Collections: IPUMS CPS

Topics: Housing and Segregation, Race and Ethnicity

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