Does Homeownership Reduce Wealth Disparities for Low- Income and Minority Households?

Review of Corporate Finance Studies, Forthcoming

55 Pages Posted: 29 Apr 2022

See all articles by Ashleigh Eldemire-Poindexter

Ashleigh Eldemire-Poindexter

Haslam College of Business, University of Tennessee

Kimberly F. Luchtenberg

American University - Department of Finance and Real Estate

Matthew Wynter

Stony Brook University, College of Business

Date Written: February 16, 2022

Abstract

We use the U.S. Department of Housing and Urban Development’s Housing Choice Voucher program as a setting to evaluate the interaction of homeownership and race on the wealth accumulation of low-income households. Using a within-treatment difference-in-differences framework, we establish that low-income households that receive assistance in owning a home experience increased wealth accumulation relative to their tenure as renters. These wealth gains are not present among low- income minority households. Our findings provide evidence that homeownership is a driver of wealth formation for low-income households and that homeownership does not inherently reduce racial disparities in wealth.

Keywords: Homeownership, Wealth Inequality, Housing Choice Vouchers

JEL Classification: G51, J15, R21

Suggested Citation

Eldemire-Poindexter, Ashleigh and Luchtenberg, Kimberly F. and Wynter, Matthew, Does Homeownership Reduce Wealth Disparities for Low- Income and Minority Households? (February 16, 2022). Review of Corporate Finance Studies, Forthcoming , Available at SSRN: https://ssrn.com/abstract=4068872

Ashleigh Eldemire-Poindexter

Haslam College of Business, University of Tennessee ( email )

Knoxville, TN 37996
United States

Kimberly F. Luchtenberg (Contact Author)

American University - Department of Finance and Real Estate ( email )

Kogod School of Business
4400 Massachusetts Ave., N.W.
Washington, DC 20016-8044
United States

Matthew Wynter

Stony Brook University, College of Business ( email )

306 Harriman Hall
Stony Brook, NY 11794
United States

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