A Dynamic Study of Racial Inequality in Home Equity during the Housing Bubble

Wenqian Dai, Ying Yang


From 2001 to 2005 the American housing market witnessed a housing bubble with rising housing prices and home ownership rates. Home equity that constitutes a large share of net worth for most families increases also during this housing bubble. This paper examines the degree to which the overall increase in housing prices and in home ownership rates affected the wealth accumulation of whites and various minority groups. Using data from the American Housing Survey of 2001 and 2005, we find that the distance between white and Black homeowners in home equity is amplified between 2001 and 2005, but the advantage of white owners over Hispanic owners disappears once other factors are held constant. Asians benefit dramatically from the housing bubble, their home equity surpasses that of whites after other variables are controlled. These findings further broaden our understanding about racial stratification in wealth in American society.


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DOI: https://doi.org/10.11114/ijsss.v2i4.457


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International Journal of Social Science Studies   ISSN 2324-8033 (Print)   ISSN 2324-8041 (Online)

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