Trulia: Homeownership Gap Between Affluent and Low-Income Americans Shrinks Slightly

The Great Recession caused a dramatic increase in the homeownership gap between high-income and low-income households, but housing and economic growth during the recovery years helped to narrow this gap, said Trulia, Seattle.

“In many ways, our current economic expansion looks more like the expansion that took place in the ‘90s,” Trulia’s The Homeownership Gap is on the Wane report said.

The report found that nationally, 77 percent of wealthy households own their own homes, well over two times the 34.9 percent homeownership rate of low-income households. But since 2012, the ownership gap between high-income and low-income households has been trending downward, decreasing to 2.3 times from 2.4.

Homeownership rates vary from metro to metro, so Trulia measured homeownership inequality by the gap between the share of homeowners among the bottom third of households by income relative to the top third. Since retirees often own homes but do not usually have incomes as high as during their working years, Trulia focused on households headed by “prime working age” people between 25 and 55.

“Since 1976, homeownership inequity has generally grown, but the chances of owning a home depend largely on the market,” the report said. It noted that in America’s 100 largest housing markets, higher-income households tend to own their homes at as much as 4.4 times the rate of those at the bottom of the income ladder.

“But despite the national trend over the past few decades, not every housing market is off limits to low-income buyers,” Trulia said. “Things like the average age of a city’s population, the magnitude of a housing market’s price range, income inequality and how long people stay in their homes all seem to play a role in ownership inequity.”

The homeownership gap is larger in the largest 100 metros than it is nationally, with 79.3 percent of wealthy households now owning, which is 2.8 times higher than the 27.9 percent homeownership rate of poor households.

“Homeownership inequality can’t be pinned to a single reason,” Trulia said. “Things like the 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 years all play a role, but none alone are strong predictors.”