Black and Hispanic households are more likely to rent and less likely to own their primary residence compared with white households. In order to advance racial equity in homeownership, changemakers have stressed the importance of both boosting homeownership rates for Black and Hispanic households and closing the racial homeownership gap. But the lack of for-sale housing supply is a critical challenge facing potential homebuyers. In this brief, we use a novel approach to assess the impact of for-sale housing supply on homeownership rates. Our research finds that from 1994 to early 2024, more supply coincided with higher homeownership rates, including for Black and Hispanic households, but racial homeownership rate gaps remained wide.

Why This Matters

These results underscore the importance of adding more for-sale supply to the housing market in order to boost homeownership rates, including for Black and Hispanic households. Simultaneously, these results suggest that a more comprehensive toolkit is needed to close racial homeownership rate gaps. This includes addressing the dearth of financial resources, the need for affordable supply, and the aspects of the homebuying system that may be biased against households of color. Federal, state, and local strategies can all help respond to these issues. In addition, our methodology highlights the need for more data in order to track key trends in real-time.