Alternative measures of homeownership gaps across segregated neighborhoods

The dramatic rise in the U.S. homeownership rate from 64% in 1996 to almost 70% in 2005 has prompted increased attention to the relation between homeownership and demographic characteristics of households. The recent rise and sharp decline of subprime lending will likely spur further interest in homeownership gaps. Statistical analysis of these differences or "gaps" in homeownership between white and minority households has evolved into a highly stylized comparison of differences in homeownership at the mean or the conditional mean. This study implements a quantile decomposition technique that identifies the unexplained portion of the gap not only at the mean, but at every percentile of the homeownership distribution. Results suggest that differences in homeownership gaps at the mean reflect a combination of small differences at the upper end and much larger gaps at the lowest end of the distribution of homeowners. This study also adds credit history to the factors that are used to explain homeownership gaps.