What Factors Drive Racial Disparities in Housing Wealth Accumulation?

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Siyan Liu and Laura D. Quinby, Boston College

Housing wealth is an important resource for economic security in retirement. Yet, Black households approaching retirement have only a fraction of the housing wealth held by White households. One reason is that Black households are less likely to own homes in the first place. A second reason, which is the focus of this paper, is that when they do own homes, they see lower wealth accumulation than White homeowners. This study uses the Panel Study of Income Dynamics to quantify the extent to which five factors – age at purchase, initial home value, appreciation, amount of borrowing, and lifetime mortgage interest rate – contribute to the racial wealth gap.