Decent, affordable housing gives families a strong foundation, helping them achieve financial stability and better access to education. However, low-income families and families of color in the U.S. often find it hard to own homes due to obstacles like a lack of affordable housing, limited access to credit, and systemic inequalities.
Habitat is sharing research through evidence briefs to show the impact of affordable housing on people and families. This brief explores how owning a home can help build wealth for low-income families and families of color. Home equity makes up more than half of their net wealth, but the benefits of homeownership differ by income, gender, and race/ethnicity. Check out the research highlights below and read the full brief.
Research Highlights
Homeownership helps build wealth by acting as a forced savings tool and through home value increases. Wealth building depends on the homeowner’s ability to build home equity.
Key Factors to Building Home Equity for Low-Income Households
- Offering affordable loans and refinancing at lower interest rates.
- Sustaining homeownership to cover transaction costs and handle home value changes.
- Buying homes with increasing values, especially when reselling, though appreciation rates depend on when and where the home is purchased
Key Barriers to Homeownership for Women
- Single women pay about 1%-2% more for similar homes than single men and sell these homes for 2%-3% less.
Key Barriers to Building Home Equity for Black and Hispanic/Latinx Households
- Black and Hispanic/Latinx homebuyers often rely on debt to buy homes and face higher mortgage rates.
- Homes bought by Black homebuyers usually have lower values, appreciate slower, and have higher property taxes.
- Black and Hispanic/Latinx households are less likely to sustain homeownership.
