Minorities and student debt holders purchased lower-priced homes when compared to White Americans and buyers without student debt, according to research conducted by Jessica Lautz, National Association of REALTORS® (NAR) vice president of Demographics and Behavioral Insights, and Michael White, Nottingham Trent University professor and director of the Centre of the Built Environment.
Lautz and White’s “Mind the Gap” working paper examines the purchase price differences among homebuyers from January 2014 to December 2017, who purchased a primary residence property and how the purchase price can lead to further wealth gaps through equity in homeownership.
Hispanic and Black Americans purchased homes 11.2% and 10.6% less expensive, respectively, than White Americans when controlling for household income, home size, location and down payment help from family.
Buyers who had student debt purchase homes that were 18.8% less expensive than those without student debt.
Homeownership is one of the best ways to build wealth and purchasing homes that are significantly less expensive can lead to lost wealth accumulation—and possibly lost homeownership—across generations. The authors suggest a number of policy steps that may help mitigate the homeownership gap, including financial literacy, refinancing student loans, expansion of mortgage financing though alternative credit scoring models and expanding public awareness of low down payment programs.
View the full “Mind The Gap” working paper here.
For more information, please visit www.nar.realtor.
