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The Dynamics of Homeownership: Eliminating the Gap Between African American and White Households

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  • Thomas P. Boehm
  • Alan M. Schlottmann

Abstract

This article uses a sample of young renters from the Panel Study of Income Dynamics and a continuous-time econometric model to explore not only the initial tenure transition to first-time homeownership, but also subsequent possible tenure transitions to a second owned home, back to rental tenure and, indirectly, to a second owned home from rental tenure. Once estimated, the predicted probabilities of these transitions are used to calculate the probability of homeownership at various times for households in the sample. These estimates are done separately for African Americans and whites for two different 11-year time intervals, 1987-1997 and 1993-2003. A primary result is that if African American education, income, net wealth and savings behavior could be brought in line with that of white households the majority of the racial gap in homeownership could be eliminated in either time period. Copyright (c) 2009 American Real Estate and Urban Economics Association.

Suggested Citation

  • Thomas P. Boehm & Alan M. Schlottmann, 2009. "The Dynamics of Homeownership: Eliminating the Gap Between African American and White Households," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 37(4), pages 599-634.
  • Handle: RePEc:bla:reesec:v:37:y:2009:i:4:p:599-634
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    References listed on IDEAS

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    Cited by:

    1. Michael J. Seiler, 2014. "The Effect of Perceived Lender Characteristics and Market Conditions on Strategic Mortgage Defaults," Framed Field Experiments 00628, The Field Experiments Website.
    2. Michael Seiler, 2014. "The Effect of Perceived Lender Characteristics and Market Conditions on Strategic Mortgage Defaults," The Journal of Real Estate Finance and Economics, Springer, vol. 48(2), pages 256-270, February.
    3. Florence Goffette-Nagot & Modibo Sidibé, 2011. "Housing Wealth Accumulation: The Role of Public Housing," Post-Print halshs-00673746, HAL.
    4. Zorlu, Aslan & Mulder, Clara H. & van Gaalen, Ruben, 2014. "Ethnic disparities in the transition to home ownership," Journal of Housing Economics, Elsevier, vol. 26(C), pages 151-163.
    5. E. Beaubrun-Diant, Kevin. & Maury, Tristan-Pierre, 2016. "Home tenure, stock market participation, and composition of the household portfolio," Journal of Housing Economics, Elsevier, vol. 32(C), pages 1-17.
    6. Goffette-Nagot, Florence & Sidibé, Modibo, 2016. "Housing wealth accumulation: The role of public housing," Regional Science and Urban Economics, Elsevier, vol. 57(C), pages 12-22.

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