Low-income households have struggled for many years to obtain the American Dream of homeownership, however that’s beginning to change. According to Trulia, economic inequality is still a subject that the U.S. is handling. They study homeownership inequality by the gap between the bottom third share of homeowners versus the top third, omitting retirees.
In Americas 100 largest metros, households with higher-income own homes at as much as 4.4 times the rate of those at the bottom. Though the historical trend has shown the market as off limits to low-income homebuyers, now that isn’t true for every metro. The average age of a cities population, the magnitude of a housing market’s price range, income inequality, and how long people stay in their homes play a role in homeownership inequity.
According to Trulia’s report, 77 percent of wealthy households own their homes, which is nearly 2.3 times the rate of poor households (34.9 percent). The gap in homeownership has been trending downward since 2012, nevertheless, from 2.4 times to 2.3. Based on the largest 100 metros, 79.3 percent of wealthy households now own homes—2.8 times higher than low-income households, which currently lie at 27.9 percent.
There isn’t one reason in particular that homeownership continues to be unequal. It’s possible it is a mixture of range of household income, range of home prices, age of the population, and the proportion of the population that have lived in their home for less than five year. However, according to Trulia, none of these are strong predictors.
“While demographic factors in some metros, such as a younger than average population, may be fueling unequal housing outcomes, along with a national trend that has been pointing to a gradually widening gap, there still seems to be plenty of opportunity for changes to local housing policy that could move the needle in a favorable way for low income groups.”
To read the full report, including regional data, click here.