Racial Disparities in Housing Returns

Amir Kermani and Francis Wong

No 29306, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We document the existence of a racial gap in realized housing returns that is an order of magnitude larger than disparities arising from housing costs alone, and is driven by differences in distressed home sales (i.e., foreclosures and short sales). Black and Hispanic homeowners are both more likely to experience a distressed sale and to live in neighborhoods where distressed sales erase more house value. However, absent financial distress, houses owned by minorities do not appreciate at substantially slower rates than houses owned by non-minorities. Racial differences in liquid wealth and income stability are important determinants of differences in distress.

JEL-codes: G5 G51 J15 (search for similar items in EconPapers)
Date: 2021-09
New Economics Papers: this item is included in nep-ure
Note: CF ME PE
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Citations: View citations in EconPapers (14)

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