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The housing bubble and the evolution of the homeownership gap

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  • Oberg, Phillip Michael

Abstract

The gap in the white/non-white homeownership rate diverged over the entire course of the recent housing-related business cycle. After controlling for a rich set of factors determining the willingness and ability to own a home, I find that the divergence during the bust can be almost completely explained by observables, where the primary contributor is family structure, particularly marriage. While the explained portion of the divergence during the boom is smaller, it is also almost entirely driven by marriage. Financial variables and education of borrowers also contribute and are consistent with explanations involving excessive risk-taking and lack of experience and search in the mortgage market by minorities. The contribution of the unexplained portion of the divergence is only noteworthy during the boom, most likely attributable to unobserved factors—such as the expectations of whites regarding earnings and asset growth—rather than discrimination.

Suggested Citation

  • Oberg, Phillip Michael, 2017. "The housing bubble and the evolution of the homeownership gap," The Quarterly Review of Economics and Finance, Elsevier, vol. 65(C), pages 25-35.
  • Handle: RePEc:eee:quaeco:v:65:y:2017:i:c:p:25-35
    DOI: 10.1016/j.qref.2016.11.003
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    References listed on IDEAS

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    More about this item

    Keywords

    Homeownership; Inequality; Family structure; Discrimination; Business cycle;

    JEL classification:

    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • E3 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles

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