Key Takeaways 

• The renter poverty rate sits at 20.6% as of 2024, down from a pandemic peak of 22.0%, but the impact varies significantly by race.

• Racial disparities in homeownership remain wide and have narrowed only modestly over time. White households remain the only group with an average homeownership rate above the national mean of 64.3%.

• While racial gaps in economic mobility have gradually improved in recent decades, income-based disparities have widened and increasingly define young adults' access to upward mobility and homeownership.

• White, Multi-racial, and Black seniors are more likely to have retirement income than Native American, Asian, or Hispanic seniors. Differences in lifetime earnings, access to retirement savings, and housing wealth contribute to these gaps. 

Introduction 

The history of racial discrimination in US housing policy is well documented. Racial-exclusionary elements of New Deal-era housing programs and unsanctioned discrimination during the post-war suburban expansion catalyzed a multi-generational cycle of inequality. Despite the dismantling of de jure racial segregation in American housing in the 1960s, evidence of its structural legacy remains pervasive in both housing and non-housing contexts.

The Chandan Economics Racial Inequities in US Housing Report is a multi-themed overview of the contrasting housing and wealth outcomes among commonly self-identified racial or ethnic groups in the United States. The analysis explores the historic and ongoing context of racial disparities in four focus areas: Housing Affordability, Household Wealth, Economic Mobility, and Retirement Security.  

Released annually, the report is a snapshot of the intersection of racial disparities in US housing and inequities in other socioeconomic dimensions, such as education, geography, income, and evolving economic conditions. Our study primarily relies on data from the US Census Bureau's American Community Survey, covering 2004 to 2024, the most recent year for which data are available. 

Racial Inequities in Housing Affordability 

For decades, housing costs have risen faster than average US incomes, making market-rate units affordable to the nation's most income-constrained renters increasingly scarce. 

However, the affordability crisis has cascaded in recent years. The disruption caused by the COVID-19 pandemic set in motion both a generational shift in lifestyle and location preferences and lower borrowing rates. Work-life dynamics evolved; new households formed, and — alongside an undersupplied housing market — home prices in many regional markets skyrocketed. Consequently, housing unaffordability emerged as a common economic pain point for many US households.

Between 2020 and 2022, the US poverty rate increased from 10.7% to 12.6%, coinciding with a pandemic-era spike in inflation. Although poverty rates rose for both renters and homeowners over this period, renters did not benefit from the low-interest-rate environment and the concurrent rise in home equity values, leaving them more negatively affected by rising living costs. A 2024 study by the Urban Institute estimates that the wealth gap between renters and homeowners has reached historic highs during the post-pandemic period, up by an average of 250% since 1989. 

Renter Households in Poverty

The national average of US renter households at or below the poverty line sits at 20.5% as of the latest available US Census data. While down from the pandemic-era high of 22.0% in 2022, the impact of the ongoing affordability crisis varies widely across major US ethnic groups.

According to Chandan Economics’ estimates using data from the US Census Bureau’s 2024 American Community Survey, Native American or Alaskan Native renter households have the highest share of residents at or below the poverty line (30.0%), followed by Black households (27.8%). Poverty rates then fall for renters that self-identify as “other” (22.1%), Hispanic households (22.0%), and multi-racial households (21.4%). Poverty levels for Asian or Pacific Islander households (18.0%) and White households (17.4%) are at the lower end of the distribution. 

Underlying these demographic data is the outsized impact of higher education rates on affordability outcomes. The poverty rate for households led by high school graduates is 25.8%, 5.1 percentage points above the national average. It then gradually falls for each additional year of education obtained and is just 8.0% for rental households headed by someone with five or more years of secondary education. 

Renter Households with a College Degree in Poverty  

We find that racial disparities persist even after controlling for higher education, though their distribution shifts. 

While Native American/Alaskan Native renter households register the highest average poverty rate among all education levels (30.0%), renter households who self-identify as “other” have the highest average poverty rate among college degree holders. Here, we consider all renter households with at least a college degree, regardless of whether they also have higher levels of education.

Notably, within the timeframe of our study, there is significant volatility in the number of people who, year to year, self-identify as Asian or Pacific Islander, Native American, belonging to multiple major races, or self-identifying as "other."  

It is plausible that exogenous factors affect how some US residents self-identify. However, our methodology cannot account for this, so little can be concluded about the redistribution of disparities after controlling for college education.

Consistent across both distributions is that White, non-Hispanic renter households register the lowest average poverty rates. 8.5% of White, non-Hispanic renter households with at least 4 years of college are at or below the poverty line, 1.5 percentage points below the next-lowest group. Black households chart the second-highest average poverty rates in both breakdowns, with 10.9% of Black college degree-holding households remaining at or below the poverty line.

Racial Inequities in Household Wealth  

Given the significant role homeownership plays in generating wealth for American families, comparing homeownership rates across demographic groups can help reveal the fundamental drivers of wealth inequality.

The Homeownership Gap 

After a 2004 peak of 69.0%, the US homeownership rate experienced cyclical erosion through 2016, falling as low as 63.4%. Excluding the see-sawing of the homeownership rate in 2020, homeownership has risen modestly in recent years, stabilizing at around 66%.

Still, these data point to a structural decline in homeownership, which, while modest overall, is experienced unevenly across education, gender, urban proximity, and race. 

Urban proximity is the most consistent marker of homeownership disparities, with the homeownership rate 32.3 percentage points higher for households living outside a metro area than for those living in the central city of a metro area. 

However, race emerges as the next strongest predictor of homeownership, with a 23.3 percentage-point gap between the group with the highest and lowest homeownership levels, outpacing the gaps observed in education levels or gender.

Race and Homeownership 

White American households (71.6%) remain the only group with an average homeownership rate above the national mean of 64.3%. Asian American or Pacific Islander households have the second-highest homeownership rate at 60.9%. Homeownership rates for households that self-identify as other, Hispanic, or Multi-racial coalesce toward the middle of the distribution.  

Meanwhile, homeownership rates stand at 48.8% for Native American households and 48.3% for Black households. As a result, the White–Native American and White–Black homeownership gaps remain the widest racial disparities, at 22.8 and 23.3 percentage points, respectively.  

Despite the dismantling of many discriminatory lending and underwriting practices over several decades, the gap between White and minority homeownership shrunk only modestly from the 1960s to the 1990s and stands higher today than it did 30 years ago. 

In 1994, the White homeownership rate was 70.0%, and the Black homeownership rate was 42.3% — a 27.7 percentage point gap. The gap fell during the second half of the 90s, reaching an all-time low of 26.6 percentage points in 2001 before resurging in the early 2000s. 

Homeownership rates then declined across all races and ethnicities in the decade following the Great Financial Crisis (GFC). However, in the immediate years after, Black homeownership fell more steeply than White homeownership, causing the gap to widen to 33.2 in 2018.  

The White-Black homeownership gap has declined notably during the pandemic years, in part driven by broad wage increases and greater location flexibility enabled by the pandemic's economic reshuffling. Nonetheless, today's gap of 28.4 percentage points sits above both the 1960 and 1994 levels, and its persistence has contributed to a multi-generational disparity in wealth and upward mobility.

Racial Inequities in Economic Mobility 

The sustained decline in US homeownership over a full economic cycle suggests that the average American household now faces structurally higher hurdles to wealth accumulation than earlier generations. These elevated barriers have important implications for upward economic mobility. 

Upward — or economic — mobility is generally defined as the ability of a child from a low-income family to rise to a higher position in the income distribution as they grow older. As we explore in this section, changes in economic mobility help explain why homeownership — long viewed as a cornerstone of upward mobility — has become less attainable for younger Americans. 

Young-Adult (Under 35) Homeownership 

The share of young adults (ages 18-35) who are homeowners has declined significantly over the past two decades. As of 2024, 31.7% of US households headed by an adult aged 18 to 35 own their home, down from 38.3% in 2004.

Over the two decades, the homeownership rate declined by 11 percentage points for White, non-Hispanic young adult households, by 3.4 percentage points for Black young adult households, but rose by 6.1 percentage points for Hispanic young adult households. 

Due to the volatility in the number of people who, from year to year, self-identify as Asian or pacific islander, Native American, belonging to multiple major races, or belonging to another race outside of the Census Bureau selections, our analysis of racial disparities in young adult homeownership is narrowed to White (non-Hispanic), Black, and Hispanic US households.

Evolving Economic Mobility Dynamics 

While the 20-year trend includes cyclical fluctuations in young adult homeownership, the broader downtrend over this period points to a shift in structural factors.  

An important aspect of these structural factors is the evolution of economic mobility dynamics. According to a 2024 research paper by Opportunity Insights, the Black-white gap in upward economic mobility shrank by 27% between 2009 and 2024, while mobility improved more modestly for Hispanic, Asian, and Native American households over the same period.  

However, while the racial gap in economic mobility has narrowed, the class gap has widened. Opportunity Insights finds that the income gap between White children growing up in low- and high-income families increased by 28% over the 15 years of their study. Findings from the 2024 Survey of Household Economics and Decisionmaking (SHED) suggest that the income gap is a key driver of the widening household wealth gap among younger adults, with the homeownership rate among those with income over $100,000 more than three times that of those with income under $50,000.

Furthermore, the declining Black-White mobility gap is being driven by increases in children's ability to move out of poverty, not their chances of reaching the upper middle class. A significant Black-White income gap persists. Annual adult incomes for white children from low-income households born in 1992 (the birth year used for the analysis) remain 41% higher, on average, than for Black children growing up in households with the same incomes. 

Taken together, the evolution of economic mobility dynamics is closely intertwined with housing access. The widening role of class in shaping economic mobility helps explain why homeownership — long viewed as a key tenet of upward mobility — has become less attainable for younger Americans across ethnic backgrounds. Meanwhile, the persistent Black-white income gap explains why, despite the growing salience of class, Black young-adult households continue to own homes at a lesser rate than White young-adult households.

Racial Inequities in Retirement Security 

Intuitively, retirement income is a core predictor of wealth as people age. According to Chandan Economics' calculations using data from the US Census Bureau's American Community Survey, senior households without retirement income are three times more likely to be at or below the poverty line than senior households with retirement income. 

However, this relationship has deteriorated over the past 20 years as the share of seniors with retirement income and in poverty has nearly tripled during this period. The trend accelerated during the pandemic— 5.8% of seniors with retirement income now live in poverty, compared to 3.2% in 2019.  

The Retirement Income Gap 

Despite its deteriorating impact on senior poverty outcomes, retirement income prevalence remains an important marker of long-term economic security. We find that White, Multi-racial, and Black senior households are more likely to have retirement income than Native American, Asian, or Hispanic households. However, a notable White-black income gap remains. 

48.2% of White, non-Hispanic senior households have retirement income, compared to 45.1% of Multi-racial senior households, and 42.9% of Black senior households. Meanwhile, 37.8% of seniors who self-identify as "Other" have retirement income, compared to 35.7% of Asian seniors and 31.5% of Hispanic seniors. 

Racial inequities in retirement security are intrinsically linked to earlier-in-life gaps in wealth accumulation and economic mobility.  

According to an analysis by the US Government Accountability Office, income and job-related factors were strongly associated with disparities in the retirement account balances of older worker households. High-income households, on average, contribute 8% of their income towards retirement, compared to 5% for low-income households, while receiving larger employer contributions. Additionally, households of all races other than White and households with children had about 28% and 20% smaller balances, respectively.

The average White household also experiences more robust wealth accumulation during their working years than the average Black household. According to research published in 2023 by the Center for Retirement Research at Boston College, the lower likelihood of minority households owning homes compared to White households helps explain these disparities. However, even among homeowners, minorities are likely to experience lower wealth accumulation during the period of ownership compared to White homeowners. 

The study, which focused on a sample of Black and White households who purchased their first home between 1980 and 2000 and remained homeowners through age 55 and the year 2019, found that the White-Black wealth gap often begins at the point of purchase.

On average, Black households in the sample entered the housing market with fewer resources to invest, resulting in lower down payments that, on average, equaled 74% of what the average White Household was able to invest at the beginning. This deficit resulted in Black households purchasing less expensive property at a later stage in adulthood than White households. 

Consequently, the average Black household had less time to see their houses grow in value and pay down their debt before turning 55. In essence, the average Black Senior homeowner began homeownership in a weaker position, and their housing wealth grew more slowly over time. 

Senior (65+) Homeownership

Between 1970 and 2000, senior homeownership growth followed a similar pattern to that of overall homeownership — rising steadily across the three decades before stalling in the early 2000s.  

One key difference, however, is that while overall homeownership peaked in 2004 and fell over the following decade before recovering some ground, senior homeownership has remained stable over the past 20 years. According to the Federal Reserve Bank of Richmond, the homeownership rate among Americans 65+ rose from roughly 67% in 1970 to about 78% in 2004, where it remains as of 2024. 

While younger segments of the population are increasingly priced out of the homebuying market, older cohorts are aging into retirement with higher existing homeownership rates than their predecessors. Further, many senior homeowners have seen home values rise in recent years while their mortgages either enjoy lower interest rates than today's average or are completely paid off. 

As a growing share of retirees opt to remain in their homes as they grow older, this is resulting in comfortable wealth cushions for the baby boomer generation. However, existing racial disparities in senior homeownership make the benefits of this trend unevenly distributed.

Homeownership rates for White seniors sit slightly above the national average at 82%. Hispanic seniors have the second-highest rate of ownership, but it sits 13% below that of White seniors, at 69%. Meanwhile, 66% of AAPI seniors and 65% of Black seniors own their homes.

On one hand, the growing share of retirees who remain in their homes could soften the impact of the senior housing demand amid today's aging US population. However, increased housing security among baby boomers could come at the cost of younger generations. Previous research by Chandan Economics, in collaboration with Arbor Realty Trust, found that as the US population ages, the surge in senior households has increased aggregate housing demand. 

From 2007 to 2021, the number of households aged 65 and older grew by 51.2% compared to just 4.4% for all other households. Moreover, the growth in the number of US households outpaced that of housing units in 11 of 13 years between 2009 and 2021.

As younger adults struggle to compete in the homebuying market and housing supply struggles to keep pace with demand, narrowing existing wealth disparities may become increasingly challenging for future generations.

Conclusion  

Today's racial inequities in US housing reflect long-standing structural gaps in the US housing market, many of which are tied to the legacy of discrimination in housing policy and financing practices.

Some disparities have narrowed in recent decades, particularly gaps in children's opportunities at upward economic mobility. However, a widening income divide is increasingly shaping access to economic mobility, and it is at this intersection of race and class that some of America's most stubborn policy challenges exist.

Larger demographic trends, such as an aging population, are also shaping how America's wealth divides take form. Homeownership continues to function as Americans' primary wealth-building mechanism, and as senior households increasingly drive ownership growth, younger households are being crowded out, complicating future wealth convergence. Racial and income-based disparities within this broader demographic shift mean the effect of these trends is compounded across the life cycle of many minority and lower-income households, affecting retirement security and contributing to intergenerational spillovers.

How to best expand housing supply and address unequal opportunities in the labor market emerge as the analysis's most primary takeaways for policymakers. Beyond this, however, is the need for more comprehensive attention to the momentous demographic shifts taking place in the United States and how they could exacerbate or amplify the effects of today's disparities.

In addition to America's rapidly growing population are increasingly urgent questions about AI's emergence and its potential to upend labor markets. Recent restrictions on immigration are also resulting in a sharp downturn in available labor, challenging housing expansion efforts and reducing long-term potential aggregate demand. These concurrent forces could magnify the structural disadvantages that young people face in the housing market. At the same time, race and class divides could leave specific swaths of the population facing the brunt of its impacts.

There is no single silver bullet for addressing demographic inequities in housing, but doing so will require intentionality, creativity, and a more critical understanding of the risks and opportunities posed by inaction or action. Deeper analysis and discussion of these issues will be important going forward, while progress towards narrowing society's wealth disparities benefits our economy and society at large.