Real Estate Wealth Is Not a Monolith: Non-Primary Real Estate and Its Role in Wealth Concentration

Housing wealth is widely recognized as the most equally distributed major asset class in advanced economies, anchoring middle-class wealth portfolios and overall wealth inequality. Yet, in this paper we observe how treating real estate as a monolith obscures a critical divide. Disaggregating net housing wealth into primary real estate equity and non-primary real estate equity reveals different distributional patterns that fundamentally alter our understanding of housing's role in the wealth distribution. Using harmonized microdata from the EU HFCS (2021) and U.S. SCF (2022), we show that while primary residences are indeed more equally distributed than overall wealth, non-primary real estate such as vacation homes, rental properties, land, and business properties makes up the most highly concentrated component of household portfolios, surpassing even financial assets. Our Gini factor decomposition analysis across various European countries and the U.S. reveals that non-primary real estate exhibits extreme concentration, with Gini coefficients ranging from 0.88 to 0.96, and contributes disproportionately to overall inequality relative to its wealth share. Therefore, the equalizing effect of housing relative to other asset classes emphasized in prior research holds only for owner-occupied homes. These findings suggest that policies treating all housing uniformly may inadvertently amplify wealth concentration, particularly in Europe where non-primary property ownership is nearly twice as prevalent as in the United States. (Stone Center Working Paper Series)