Racial Disparities in Housing Returns
We document the existence of a racial gap in realized housing returns that is an order of magnitude larger than disparities arising from housing costs alone, and is driven by differences in distressed home sales (i.e., foreclosures and short sales). Black and Hispanic homeowners are both more likely to experience a distressed sale and to live in neighborhoods where distressed sales erase more house value. However, absent financial distress, houses owned by minorities do not appreciate at substantially slower rates than houses owned by non-minorities. Racial differences in liquid wealth and income stability are important determinants of differences in distress.
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Copy CitationAmir Kermani and Francis Wong, "Racial Disparities in Housing Returns," NBER Working Paper 29306 (2021), https://doi.org/10.3386/w29306.Download Citation
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Published Versions
Amir Kermani & Francis Wong, 2026. "Racial Disparities in Housing Returns," American Economic Review, vol 116(1), pages 287-331.
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