Why America's Racial Wealth Gap Is Really a Homeownership Gap

March 12, 2015 | | CityLab |

Owning a home isn't just a fragment of the American Dream, it's the key to it. Homeownership is also the primary way by which Americans accumulate wealth. American asset-building policies are heavily focused on homeownership, but these policies have discriminated against minorities in the past, and have left a lasting scar.

People of color continue to face barriers to homeownership. They are less likely to own a home (below) and less likely to get returns from the homes they do own, says Catherine Ruetschlin, senior policy analyst at Demos, a public policy organization. Ruetschlin and her colleagues have authored a new reportshowing the extent to which inequality in homeownership drives the racial wealth gap, and how eliminating this disparity could significantly reduce U.S.wealth inequality.

The report finds that if homeownership rates were the same for all races, the wealth gap between black and white families would be reduced by 31 percent.