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The Park Place Economist

Abstract

Despite increases in homeownership and efforts to abolish the American homeownership gap in the late twentieth century, there is little evidence that the gap has decreased. I study the homeownership levels for five minority races and compare them to the homeownership levels of white Americans to determine whether discrimination is still the cause of this gap. To do this, I first pool five years of recent data from the IPUMS USA: ACS 2015-2019 database. I then employ the empirical model that uses two regression equations. One controls for human capital and other socioeconomic variables to determine the raw effect of race on homeownership, while the other does not control for these other variables and only includes the race variables in the equation. The difference in the coefficients of the race variable in the two equations show the explained effect of race on homeownership due to differences in the human capital control variables and to what degree for each minority. In line with common knowledge, the results show that racial differences in human capital account for some of the differences in homeownership levels. However, the coefficients show that even after controlling for other variables, there is a gap between white Americans owning homes versus the minorities. Therefore, the results suggest that minorities experience discrimination in housing markets.

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