Housing wealth is a vital useful resource for financial safety in retirement. But, Black households approaching retirement have solely a fraction of the housing wealth held by White households. One cause is that Black households are much less more likely to personal houses within the first place. A second cause, which is the main focus of this paper, is that once they do personal houses, they see decrease wealth accumulation than White owners. This research makes use of the Panel Examine of Revenue Dynamics to find out what share of the age-55 housing wealth hole is because of drawback on the time of first buy and what share is because of slower appreciation of subsequent housing wealth.
The paper discovered that:
- Older Black owners confronted obstacles at each step – from accumulating a down fee to purchasing in enticing areas to accessing credit score to upsize.
- Each components – smaller down funds and slower progress in house values – had been equally vital contributors to the age-55 hole.
The coverage implications are:
- Racial disparities in housing wealth are stark amongst owners nearing retirement.
- Future analysis ought to contemplate how structural modifications within the housing market