The Runaway Costs of Housing and the Wealth Gap
The costs of owner-occupied and rental housing have continued to dramatically increase over this past year. Home price appreciation nationally hit 20.6% in March of this year, topping the previous high of 20% in August of 2021. Professionally managed apartments increased rents by 12% nationally, and some metro areas saw rents increase by over 20%.
This substantial increase in home values has certainly widened the wealth gap between homeowners and renters. Even before these recent home value increases, the median wealth of homeowners stood at about 40 times the median income of renter households. On a national level with White families’ homeownership rate now at 74%, Hispanic homeownership rate now just over 49% and Black homeownership rate now at just over 45%, the wealth gap in our country is dramatically increasing. And the disparities locally for homeownership rates and wealth accumulation based on color is even at a wider gap.
The disparity between Black and White homeownership rates reflect the nation’s long and history of racial discrimination in housing markets, including covenants barring Black households from purchasing homes in many communities and mortgage lending practices limiting their access to financing. The homeownership gap is also reflective of discriminatory treatment in the broader economy that has constrained their earning power as well.
So, where do we go from here? Certainly more subsidies are needed in order to get lower-income and families of color into homeownership, and with the recent increases in housing costs and interest rates, this is quite a challenge. But we are always up for a challenge, and we will do our best to make it work for the families in our area communities. Let’s make it happen!
*Statistics from The State of the Nation’s Housing 2022 Report by Joint Center for Housing Studies of Harvard University.