Research Report Before the Pandemic, Homeowners of Color Faced Structural Barriers to the Benefits of Homeownership
Michael Neal, Jung Hyun Choi, John Walsh
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Heading into this crisis, Black and Hispanic homeowners accrued a smaller financial benefit from homeownership than White homeowners. Homeowners of color typically had lower housing equity, because they purchased homes of lower value with higher mortgage debt later in life. They also had marginally higher costs associated with homeownership, largely due to the greater preponderance of mortgages and slightly higher mortgage rates thanks largely to lower credit scores as well as higher loan-to-value and debt-to-income ratios. The researchers identify lower wages and assets as well as a lack of intergenerational wealth as significant contributors to these differences. They also highlight the historic role of racially discriminatory practices in real estate sales, value-stripping zoning laws, wealth-stripping property laws and violent attacks against communities of color. The researchers offer four proposals to address persistent discriminatory practices and increase the value of homeownership for homeowners of color.

Research Areas Economic mobility and inequality Wealth and financial well-being Social safety net Race and equity Housing finance Housing
Tags Asset and debts Racial and ethnic disparities Housing markets Housing and the economy Homeownership Financial products and services Housing affordability Wealth inequality Public and private investment Racial barriers to accessing the safety net Racial barriers to housing Racial homeownership gap Racial inequities in economic mobility Financial stability
Policy Centers Housing Finance Policy Center