Homeownership has been and continues to be an important driver of wealth creation in the US, with owner-occupied housing accounting for almost a quarter of assets among US households. When examining homeownership across different demographic groups, rates vary significantly, indicating that the economic and financial benefits of homeownership do not reach everyone.
A recently released NAHB special study explores the geographic differences in homeownership rates between black and white households (as well as Hispanic or Latino and white households, which will be the highlight of an upcoming blog). Figure 1 (on the first tab) shows homeownership rates among black households. Black homeownership rates are, in general, highest among counties in the South and are lower among counties in the Northeast, Midwest, and West regions.
Figure 1, on the second tab, shows the gap between white and black households on the county level. The county level gaps in homeownership rates (white homeownership minus black homeownership rate) are generally larger in the Northeast and smaller in the South. There are only a handful of counties in which the black homeownership rate exceeds the white homeownership rate: almost all of them are in the South and most do not have a sizable number of black households (counties highlighted in red).
To help explain the geographic differences between white and black homeownership, the special study also examines demographic variables previously shown to be significantly associated with homeownership, such as marriage rates and age. Using these variables, a fixed effects regression model is employed. It shows that, even when controlling for age, marriage rates, and price-to-income ratios (home value to household income ratios), black homeownership is still 22 percent lower than white homeownership rates, suggesting that factors beyond demographics are affecting the differences. To read the special study, please click here.