Understanding Racial Inequality in Homeownership: A Dynamic Approach

Vanesa Estrada, University of California, Los Angeles

This analysis is interested in understanding why racial differences in homeownership have persisted in the past three decades and how they could be diminished. The Panel Study of Income Dynamics allows the opportunity to study the dynamics of the process of transitioning into and out of homeownership and answer many questions about the occurrence and timing of these flows. Using event history models I assess the effects of race and various other factors in the occurrence and timing of becoming an owner, buying subsequent homes and returning to renter status. An emphasis is placed on how these effects have changed over time and how they vary across cohorts. These estimates are then used in simulations to examine what accounts for the racial gap in aggregate homeownership levels and what changes might close this gap.