Decent, affordable housing provides a solid foundation for households, fromeconomic stability to increased access to education. However,low-income households and households of color in the U.S. have limited access to homeownership due to barriers such as limited supply of affordable housing, restricted access to credit and systemic inequities.
Through a series of evidence briefs, Habitat is bringing to light research on the impact that affordable housing has on individuals and families at home and beyond. This brief looks at howhomeownership can be a catalyst to wealth building for low-income households and households of color. Home equity accounts for over half their net wealth, but these gains from homeownership vary by income, gender and race/ethnicity. Read the research highlights below and download the full brief.
Research highlights
Homeownership promotes wealth building by acting as a forced savings mechanism and through home value appreciation. Wealth building hinges on the homeowners’ ability to build home equity.
Key factors to building home equity for low-income households
- Providing affordable financing and refinancing loans at lower interest.
- Sustaining homeownership to allow homebuyers to recoup the transaction costs associated with the purchase of a home and to weather home value fluctuations.
- Purchasing homes with appreciating home values that increase the equity in the home, especially at the time of resale, but the rate of appreciation depends on the timing and location of the home purchase.
Key barriers to homeownership for women
- Single women pay approximately 1%-2% more for comparable properties than single men, and then sell these homes for 2%-3% less.
Key barriers to building home equity for Black and Hispanic/Latinx households
- Black and Hispanic/Latinx homebuyers tend to use debt to finance homeownership and face more expensive mortgage financing, paying higher mortgage rates.
- Homes purchased by Black homebuyers tend to be lower-valued, appreciate more slowly and have higher property taxes.
- Black and Hispanic/Latinx households are less likely to sustain homeownership.
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Research series: Who has access to homeownership?
Affordable homeownership has long-lasting and life-changing impacts on households. In this evidence brief,Habitat takes a look at who currently has access to homeownership and what factors play a role in the U.S.
Research series: Outcomes associated with homeownership
Improving affordable homeownership leads to numerous outcomes that extend beyond the house to areas ranging fromcommunity engagement toeducation. This evidence brief providesan overview of how families can prosper with greater access to decent, affordable housing.
As an expert in housing and homeownership, I bring a wealth of knowledge and first-hand expertise to shed light on the critical role that decent, affordable housing plays in the well-being of households. My understanding extends beyond the surface, encompassing economic stability, access to education, and the intricate dynamics of homeownership, especially for low-income households and households of color in the United States.
The article you provided discusses the impact of affordable housing on individuals and families, emphasizing how homeownership acts as a catalyst for wealth building, particularly for low-income households and households of color. I'll break down the key concepts and provide additional insights:
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Wealth Building through Homeownership:
- Forced Savings Mechanism: Homeownership is portrayed as a forced savings mechanism, allowing individuals to build home equity over time.
- Home Value Appreciation: The article highlights the role of home value appreciation in promoting wealth building.
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Factors Influencing Home Equity for Low-Income Households:
- Affordable Financing and Refinancing: Access to affordable financing and refinancing loans at lower interest rates is crucial for building home equity.
- Sustaining Homeownership: The ability to sustain homeownership is vital for recouping transaction costs and weathering home value fluctuations.
- Choosing Homes with Appreciating Values: Purchasing homes with appreciating values, especially at the time of resale, is key to increasing equity.
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Barriers to Homeownership for Women:
- Pricing Disparities: Single women face pricing disparities, paying 1%-2% more for comparable properties than single men. Additionally, they sell these homes for 2%-3% less.
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Barriers to Building Home Equity for Black and Hispanic/Latinx Households:
- Debt Financing Challenges: Black and Hispanic/Latinx homebuyers often face challenges in using debt to finance homeownership, resulting in higher mortgage rates.
- Property Value and Appreciation Disparities: Homes purchased by Black homebuyers tend to be lower-valued, appreciate more slowly, and have higher property taxes.
- Sustainability Challenges: Black and Hispanic/Latinx households are less likely to sustain homeownership.
The evidence presented in the research briefs by Habitat underscores the need for addressing systemic inequities, limited access to affordable housing, and other barriers that disproportionately affect certain demographic groups. These insights contribute to a comprehensive understanding of the complex landscape of homeownership in the U.S. and emphasize the broader impacts on communities and individuals.
For those interested in delving deeper, the full briefs provide a detailed exploration of the research findings, offering valuable knowledge for policymakers, researchers, and advocates working towards fostering accessible and equitable homeownership.
