Does Homeownership Reduce Wealth Disparities for Low-Income and Minority Households?

Ashleigh Eldemire, Kimberly F Luchtenberg and Matthew M Wynter

The Review of Corporate Finance Studies, 2022, vol. 11, issue 3, 465-510

Abstract: We use the U.S. Department of Housing and Urban Development’s Housing Choice Voucher program as a setting to evaluate the interaction of homeownership and race on the wealth accumulation of low-income households. Using a within-treatment difference-in-differences framework, we establish that low-income households that receive assistance in owning a home experience increased wealth accumulation relative to their tenure as renters. These wealth gains are not present among low-income minority households. Our findings provide evidence that homeownership is a driver of wealth formation for low-income households and that homeownership does not inherently reduce racial disparities in wealth. (JEL G51, J15, R21).

Date: 2022
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