Homeownership is a critical tool for household wealth creation. In addition to providing a stable source of housing, it has historically been the best way for American families to accumulate wealth over multiple generations. Yet, there is persistent inequality in homeownership attainment and equity building across racial and ethnic lines (Goodman and Zhu 2021).

According to the latest data from the 2019 American Community Survey, 72 percent of non-Hispanic white households owned homes, compared with 61 percent of Asian households, 48 percent of Hispanic households, and 42 percent of Black households. Notably, the current homeownership rate for Black households is even lower than it was when fair housing laws were passed in 1968.

Homeownership tends to play a bigger role in creating wealth for families of color than it does for white families. For example, housing equity makes up nearly 60 percent of the total net worth for Black homeowners, compared with 43 percent of the total net worth for white homeowners. However, black households with housing equity have about half the median equity of white households. These numbers are troubling because positive equity gives homeowners more wealth, cushioning families against emergencies and providing the means for moving up the economic ladder (Neal, Choi, and Walsh 2020).