Racial and Ethnic Inequality in Homeownership and Housing Equity

Abstract

Wealth inequality, particularly in housing, has received increased attention in recent years for its importance to racial and ethnic stratification. Yet, while we know a fair amount about black‐white wealth inequality, many questions remain regarding sources of Hispanic asset inequality. This article addresses this gap by examining racial and ethnic inequality in homeownership and housing equity among the pre‐retirement population. Results support a stratification perspective of inequality for both blacks and Hispanics; even after accounting for numerous life‐cycle, resource, and social‐psychological considerations, blacks and Hispanics continue to lag significantly behind whites in housing wealth. While Hispanics initially appear better off than blacks with respect to housing, this is largely a function of their more favorable family structure. Important differences between blacks and Hispanics in the main contributors to housing inequality highlight the need to take a more multiethnic perspective on wealth stratification.

Housing and wealth inequality: Racial-ethnic differences in home equity in the United States

“…The same is true for mortgage and housing characteristics for blacks and Hispanics. These findings are consistent with Flippen's (2001a) study of home equity among preretirement-age whites, blacks, and Hispanics, as well as with considerable evidence that nonwhites are widely discriminated against in the housing market in ways that limit their access to the most-favorable neighborhoods and housing (Alba and Logan 1992;Alba et al 2000a;Flippen 2001b;Logan and Alba 1993;Massey and Denton 1993;Rosenbaum and Friedman 2001 ;Ross and Yinger 2002;Yinger 1995). Such discrimination (e.g., providing less information, steering to more heavily minority areas, showing smaller, lower-quality, or lower-value homes) should mute the influence of family and market factors on housing equity, as we found here.…”

“…However, many studies have also shown that black and Hispanic households are dealt with less favorably than majority whites at each stage of the process, from locating to acquiring to financing housing (Farley 1996;Massey and Denton 1993;Ross and Yinger 2002;Turner 1992;Yinger 1995Yinger , 1997. Such differential treatment should reduce minorities' accumulation of home equity compared with whites' in that blacks and Hispanics find it more difficult to purchase homes and to do so with favorable mortgage terms in areas with high values and levels of appreciation (Bradford 2002;Flippen 2001aFlippen , 2001bKrivo 1995;Long and Caudill 1992;Munnell et al 1996;Ross and Yinger 2002;Turner 1992;Yinger 1995). …”

“…We overcame this problem by conducting an in-depth examination of the largest source of wealth for most households with any wealth: housing equity (U.S. Census Bureau 2001;Wolff 1998). Only Parcel (1982), Blau and Graham (1990), and Flippen (2001a) have conducted analyses of racial inequality in the value of home equity in national samples. However, the studies by Parcel and by Blau and Graham are both dated and ignored critical housing and market factors.…”

“…Research on wealth inequality beyond the black-white divide is in its infancy (Campbell and Kaufman 2000;Flippen 2001a;Hao forthcoming). A larger literature has examined residential segregation and inequality in housing conditions for whites and Hispanics or Asians, but this research has not connected housing conditions to home equity or wealth (Alba and Logan 1992;Alba, Logan, and Stults 2000b;Fischer 2003;Flippen 2001b;Frey and Farley 1996;Krivo 1995;Massey and Denton 1993;Myers and Lee 1998;Rosenbaum and Friedman 2001). We addressed this gap by examining the determinants of inequality in housing equity among whites, blacks, Asians, and Hispanics in the United States.…”

“…These practices also limit access to communities with greater status and amenities, such as good-quality schools, parks, and shopping (e.g., Alba, Logan, and Stults 2000a;Flippen 2001b;Rosenbaum and Friedman 2001). Whites' prejudice against living in areas with numerous minorities (especially blacks) also weakens the demand for housing in nonwhite neighborhoods (Bobo and Zubrinsky 1996;Charles 2000;Farley et al 1994;Krysan 2002).…”