Racial Differences in Home Ownership and Home Equity Among Preretirement-Aged Households

The article seeks to determine the extent of unexplained racial residual in home ownership and home equity that could possibly be explained by discrimination on the part of lenders or other institutions. While many factors differ substantially between black and white households- besides family income, none of these factors can explain much of the overall inequality in home equity. Although there are sizable income disparities that lead to lower home ownership rates among blacks, these alone are only sufficient in explaining about a quarter of the gap in expected home equity between blacks and whites. This means that the remaining portion of unexplained racial gaps is large and appears to support the hypothesis that the underlying cause of racial differences in expected home equity rests with the behavior of lenders and creditors.