Trend  #6: Closing the Gaps

August 21, 2017 at 10:00 AM | Posted by Team DataTree

   Homeownership is a goal shared among all people, regardless of race or ethnicity, and remains11 the  main          driver of wealth creation for the majority of households in the United States.

 Trend 6, fig 1.pngNot surprisingly, ethnicity and homeownership rates  are a frequent topic of research and often that research identifies homeownership gaps among  ethnicities.  In 2015, I released  a report entitled "The State of Homeownership - Homeownership, Economic Mobility and the Challenges Facing the Nation's Latino and African American Communities12," which showed that there are clear and consistent differences between the homeownership rates of different ethnicities, even when age is held constant. Other reports by the National Association of Hispanic Real Estate Professionals1 (NAHREP), the National Association of  Real Estate Brokers14  (NAREB), and the  Asian Real Estate Association of America15  (AREAA) also show the existence of homeownership gaps.

Since homeownership is one of the key components of achieving the American Dream, understanding the observable differences in homeownership rates by ethnicity may help identify ways to advance the prospects for homeownership across all ethnicities.

Differences in homeownership rates can be attributed to many household characteristics, making it difficult to make broad conclusions. For example, a lower homeownership rate in a particular ethnic group may be the result of economic, demographic and educational factors that are causally related to homeownership, but only correlated with ethnicity.

  • A 2015 Census16  study showed that 15 percent of Hispanics had a bachelor's degree compared to 
  • Access the Complete Report - 6 Trends Poised to Reshape Homeownership Demand.png22 percent of African-Americans - a difference of 7 percentage po ints. The education gap between Whites and African-Americans remained stable, between 11 and 14 percentage points from 1988 to 2015. Since greater educational attainment typically leads to  greater income, these ethnic differences in educational attainment levels also influence income disparities across ethnicities. So, one reason a homeownership gap between different ethnicities exists is because disparities in educational attainment levels and, subsequently, income levels, also exist. It's important to identify the relationship between ethnicity and homeownership after controlling for the directly attributable economic, demographic and educational relationships that are also correlated with ethnicity.

  • Using the same model we used to isolate and analyze other household characteristics on homeownership, Figure 7 below shows the gap in homeownership rates by ethnicity, when all other factors are held constant. The result is clear . Ethnic homeownership differences remain, even after controlling for age, marital status, the number of children in the household, education, income and the impact of economic conditions.

In fact, Hispanic households have a 19.6 percent lower homeownership rate compared to White American households. Homeownership among African-American households is 18.8 percent lower than White households and Asian-American households have a 14.7 percent lower homeownership rate than White households when all else is held constant.

Trend 6, Fig 7.png


To access the full study, please download it from the First American Economic Center   Blog. When you need real estate and homeownership data, is the  solution. Start your free trial to see for yourself.  

Topics: homeownership, DataTree, real estate