The FRED Blog has used data on homeownership from the US Census to discuss regional and racial differences in the fraction of households who own a home. Today, we use data from the US Bureau of Labor Statistics to explore the same topic from a different perspective: We compare the proportion of homeowners to renters across racial groups.
The FRED graph above shows data from the Consumer Expenditure Surveys on the fraction of households who own a home and the fraction of households who rent a home. Households are classified in racial groups as either “White and All Other Races, Not Including Black or African American” (blue line) or “Black or African American” (red line).* We calculate the proportion of homeowner households to renter households and include a custom horizontal line with a value of “1” (dashed black line) to make the analysis easier.
On average, there are at least two non-Black or African American households that own a home for every non-Black or African American household that rents a home. By contrast, the number of Black or African American households that own a home is consistently smaller than the number of Black or African American households that rent a home.
Why is there a racial gap in homeownership? There are multiple reasons. The US Department of the Treasury’s Office of Economic Policy lists past government policies, discrimination in the private mortgage market, and differences in economic well-being. On this last reason, the Board of Governors of the Federal Reserve System’s Report on the Economic Well-Being of U.S. Households in 2023 emphasizes the role of income in making homeownership accessible. The report also shows recent data on homeownership/renting status according to age and disability status.
Although there are many reasons behind the racial gap in homeownership, income gaps between population groups likely play a key role in it.
* Data on “Asian” households, by themselves, are shown here because the BLS dataset includes them in the “White and All Other Races, Not Including Black or African American” group.
How this graph was created: Search FRED for the series “Consumer Unit Characteristics: Percent Homeowner by Race: White and All Other Races, Not Including Black or African American.” Click “Edit Graph” and use the “Edit Line” tab to customize the data by adding the data series “Consumer Unit Characteristics: Percent Renter by Race: White and All Other Races, Not Including Black or African American.” Next, type the formula a/b and click “Apply.” Use the “Add Line” tab to search for and add the homeownership data series for “Black or African American” households. Repeat the data customization process described earlier to calculate the ratio of homeowners to renters for “Black or African American” households. Last, use the “Add Line” tab to add a custom line with start and end values equal to “1.”
Suggested by Asise Bhinder and Diego Mendez-Carbajo.
