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Title: How Did the Housing Bust Affect the White-Black Homeownership Gap?
Citation Type: Working Paper
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 busy period of 2005 through 2011. Our analysis shows that the housing bust did not affect the homeownership gap uniformly. In fact, we find that the gap decreased for households that were the least likely to own and remain unchanged for households that were most likely to own, and that medium likely to own black households that were especially vulnerable to the crisis. Contrary to the popular press's focus on the role of predatory lending among minority households, we find that the contribution of racial differences to the residual gap (which potentially captures any discriminatory practices) was fairly modest. Overall, the changes in the total racial gap over the sample period are substantively explained by changes in wage income, interest divided or rental income, length of residence, and marital status, although the extent of their respective influences varies 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; Seah, Kiat Y.; Le, Kien T.
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Publication Number: 2013-011
Institution: Insititute of Real Estate Studies
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Data Collections: IPUMS USA
Topics: Housing and Segregation
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