Homeownership Across the American Life Course: Estimating the Racial Divide

Abstract

Homeownership has historically been viewed as a fundamental piece of the American dream, with up to 67% of households owning their home as of 2010. Yet, it has also been demonstrated that nonwhites are less likely to own a home and that the value of their homes is much less than that for whites, even when social class is taken into account. This paper explores the overall life-course patterns of homeownership and the importance of racial differences in understanding those dynamics. Based upon a life table methodology, we examine the homeownership patterns for individuals between the ages of 25-55 using 36 waves of the Panel Study of Income Dynamics. Our findings indicate that although the vast majority of nonwhites will eventually become homeowners, there is nevertheless a significant racial divide in the patterns of homeownership. Nonwhites are less likely than whites to become homeowners, are more likely to purchase their first home at a later age, are less likely to have acquired as much equity in their home, and are less likely to own their home outright. The implications of these findings are discussed within the overall context of racial stratification in America.

A Framework for Explaining Black-White Inequality in Homeownership Sustainability

“…These include Boehm and Schlottmann's two studies (2004,2009), which analyzed the PSID's longitudinal data and found that minority homeowners were more likely than Whites to exit and were less likely to return to owning. Similar results were confirmed by Hirschl and Rank (2010), who used the PSID to track American families' housing tenure changes throughout their life trajectories and discovered a higher likelihood of homeownership exit among minority households. Using data from the National Longitudinal Studies of Youth, Haurin and Rosenthal (2004) focused on first-time homeowners and found that minority families had shorter lengths of ownership spells than comparable Whites.…”

“…For example, HMDA-based studies on mortgage denial are often criticized for the lack of control for wealth and asset variables 7 (Munnell et al, 1996). The PSID's longitudinal structure and rich information make it a commonly used dataset for homeownership studies (Dawkins, 2005;Hall & Crowder, 2011;Hirschl & Rank, 2010;Sharp & Hall, 2014;Turner & Smith, 2009). Choosing the PSID, therefore, makes it convenient to compare findings.…”

Marriage, Marital History, and Black – White Wealth Differentials Among Older Women

“…Evidence of growing racial disparities in wealth is rooted in racial differences in home ownership (cf. Hall & Crowder, ; Hirschl & Rank, ). Indeed, racial differences in nonhousing wealth declined between the two most recent cohorts (from $133,816 to $117,348).…”

“…All financial values, both income and wealth, have been adjusted to 2008 dollars. Limited access to the home ownership market by women and Blacks (Sykes, ) has contributed to large racial disparities in homeownership (see Hirschl & Rank, , for an overview). We ran all models on our net worth value with and without housing wealth and report the results for both.…”

Chinese Immigrant Wealth: Heterogeneity in Adaptation

“…Attainment and life course scholars assume a relatively straight line wealth accumulation pattern over time, although life course research implies that individually-determined turning points may alter an accumulation trajectory [66, 67]. For instance, divorce may reduce the rate of accumulation for both parties).…”