The Role of Housing in the Racial Wealth Gap, 1992–2022

This paper investigates the evolution of the racial wealth gap in the United States, with a particular focus on the role of housing. Using data from the Survey of Consumer Finances (SCF), we find that over the past three decades, the racial wealth gap measured by the dollar amount has widened, while the percentage change in wealth reveals a more nuanced picture. Decomposition analysis reveals that differences in homeownership rates account for over one-third of the Black–White and Hispanic–White wealth gaps at the mean, and this finding holds true for both pre- and post-Great Recession periods. Looking across the wealth distribution, we further find that the homeownership gap explains a larger portion of the racial gap at the lower end of the wealth distribution. In contrast, stock and business ownership are more critical factors for more affluent households.