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THE
HOMEOWNERSHIP
GAP WIDENS
e homeownership gap between black
and white homeowners has widened to its
largest level in over 50 years, according to the
Urban Institute. In a research report from
Urban's Housing Finance Policy Center,
Researchers Jung Hyun Choi, Alanna
McCargo, Michael Neal, Laurie Goodman,
and Caitlin Young, analyze what has caused
these disparities.
According to the research, just 17% of the
homeownership gap remains unexplained by
observed variables and could be caused by
differences in parental wealth, information
networks or the vestiges of policies and
structures that have made it difficult for
black households to obtain and benefit from
homeownership.
At the national level, median household
income for black households is substantially
lower than for white households ($38,183 versus
$61,363 in 2017).
Urban also notes that marital status has
a strong association with homeownership
rates. Income is one of the largest disparities
in homeownership. e gap is large among
low-income households but is less than 10%
percentage points for households earning
more than $150,000. e gap jumps to 27%
for households earning less than $25,000 and
28% for households earning between $25,000
and $50,000. Low-income white households
are more likely to be homeowners, and white
households at the lowest income levels still
have a higher overall homeownership rate
than black households, at over 50%.
Another key disparity is credit scores.
According to the study, 50% of white
households have a FICO credit score above
700, compared with only 20.6% of black
households. Renting is one factor driving this
difference.
"e data shows that black people are
disproportionately more likely to have thin
credit histories and no credit scores," Urban's
report stated. "is is a key point because
in the housing context, we know that most
black households are renters and that rental
payments are largely unreported to traditional
credit bureaus."
Marital status is an important barometer
for homeownership. Compared with white
households, black households are less likely to
get married. If black households were married
at the same rate as white households, the
black homeownership rate would increase 9
percentage points.
