Does housing wealth contribute to or temper the widening wealth gap in America?

Abstract

Does housing help to increase or temper the widening gap in the distribution of wealth? Paradoxically, it may do both. Housing wealth is still the cornerstone of household wealth, and homeowners hold almost all of the nation's wealth. The uneven distribution of household net wealth is worsening, even though housing helped homeowners increase net wealth during the last recession. Because housing wealth is more balanced than other types of wealth and home equity is more important to low-income and minority households, it helps create a more egalitarian overall distribution of wealth.This article demonstrates that the relationship between housing wealth and the distribution of household net wealth and other types of wealth is significant and should be included in the criteria that frame future debates on housing policy.

The Socioeconomic, Demographic, and Political Effects of Housing in Comparative Perspective

“…However, homeownership may not pay off as well as other potential investments. Low-income households often overinvest in homeownership and sell at a real loss (Beracha & Johnson 2012, Di 2005, Herbert & Belsky 2008). The rise of predatory lending and the devastating effects of foreclosure on families calls into question whether average wealth gains justify these inequalities in risk and outcomes (Pattillo 2013).…”

Health Status of People Undergoing Foreclosure in the Philadelphia Region

“…32,33 Finally, housing is one of the most important sources of wealth for low-income households in the United States, 26,33,34 and to the extent that wealth is a determinant of health status 35,36 housing loss would be expected to have substantial effects on health. In addition to harming the health of the individual undergoing foreclosure, these community-level mechanisms can be expected to have a detrimental effect on the health of community members who are not themselves undergoing foreclosure.…”

Deflating the Dream: Radical Risk and the Neoliberalization of Homeownership

“…To buttress the argument for expanding homeownership to minimize wealth disparities, policy makers pointed to the significant role of housing equity in the transmission of intergenerational wealth (Di, 2005; Harkness & Newman, 2003; Shapiro & Wolff, 2001). A 2005 study of homeownership and wealth demonstrated the greater importance of homeownership wealth for African Americans and for lower‐income people (Di, 2005). While for all groups homeowners accumulated more wealth than did renters, the ratio was higher for African‐American homeowners compared to renters (37:1) than for White homeowners and renters (25:1).…”