Chandan Economics "Research 2025 Report" Finds Consistent Racial Inequalities

 

Racial Inequities in US Housing: 2025 Report. The Chandan Economics Research Team. January 28, 2025. 

The Chandan Economics Racial Inequities in U.S. Housing Report is a multi-themed overview of the contrasting housing and wealth outcomes among commonly referenced racial or ethnic groups in the United States. Our analysis explores the housing outcomes of racial groups within four focus areas: Housing Affordability, Household Wealth, Credit Access and Investment, and Housing and Environmental Quality. The annual report provides a snapshot of the historical intersection between racial disparities in housing outcomes and inequities in other socioeconomic dimensions, such as education, wealth and upward mobility, health, and access to financial markets.

The major findings of the Report are:

(1) Home price and rent increases over the past decade have disproportionately impacted cost-burdened and minority households.

According to a 2022 report from Up for Growth, roughly 92% of Latino [4] Households living in a metropolitan statistical Area (MSA) - 51 million people - live in a market experiencing housing underproduction. Such underproduction can lead to household crowding, resulting in fewer individuals purchasing homes and taking advantage of the home equity appreciation homeowners typically enjoy.

(2) The homeownership gap between White and minority-led households declined modestly during the pandemic years but remains at a 28.5 percentage point gap. Despite the dismantling of many discriminatory lending and underwriting practices over the last several decades, the gap between White and Black homeownership is wider today than it was before the civil rights era. In 1960, the White homeownership rate was 65%, and the Black homeownership rate was 38% - a 27-percentage point gap. Homeownership rates broadly declined across all races and ethnicities in the decade following the Great Financial Crisis (GFC). Still, the gap widened as Black and Hispanic households were more than twice as likely than non-Hispanic White households to receive a sub-prime loan during the housing bubble - exacerbating the crisis’s impact in minority-majority communities.

(3) The share of minorities without a bank account has fallen since the Great Financial Crisis but remains measurably above the unbanked rate among White Households. Unbanked rates among Native American and Alaskan Native households have also decreased substantially across this period but experienced an upswing between 2015-2017 and again after 2021. Native American and Alaskan Native households remain the highest unbanked racial cohort at 12.2%.

(4) Several indicators of public health and environmental quality remain worse in historically redlined areas.

(5) The racial gap in credit access is significantly higher when measuring the share of the population that receives prime credit rates. Asian and White Americans have significantly higher proportions of prime borrowers, representing 62% and 51% of their respective populations. The share drops steeply for Hispanic and Black Americans, with 29% and 20% of the population receiving prime rates, respectively. Similarly, just 24% of those identifying as all other racial groups have access to prime rates.