Who Struggles After Buying? Disparities in New-Homeowner Financial Distress

Abstract

Discussions of homeownership and mortgage-access policy often flaunt its benefits while giving limited attention to its costs. Using linked property transactions and credit records, we document race and gender gaps in financial fragility after home purchase. Black and female borrowers show larger increases in 30+ and 90+ day delinquencies than White and male borrowers, even after controlling for individual and neighborhood fixed effects, property characteristics, credit score, and income-at-purchase. They also accumulate more student debt, while credit card balances rise for all borrowers but faster for Black borrowers. These post-purchase disparities inform our understanding of benefits to homeownership.

Keywords: Financial Distress, Racial Disparities, Gender Disparities, Transition into Homeownership

JEL Classification: G51, R21, J15, J16