The gaps in real estate ownership and wealth between white and Black households are documented in the United States. Restrictive zoning and institutional investment can influence certain housing markets.
The Essentials
- In 2026, the homeownership rate gap between white and Black Americans reaches 28.4 percentage points, a level higher than in 1960, according to Chandan Economics.
- Real estate capital is transmitted three times more effectively than income between generations, according to a 2026 NBER Working Paper: owning property determines wealth trajectory far beyond salary.
- Restrictive zoning functions as a regulatory barrier to entry: it limits supply, maintains prices, and captures gains in favor of existing owners.
- Institutional capital amplifies this mechanism by absorbing the stock of affordable housing, where first-time homebuyers would otherwise have a chance to enter.
- By 2033, 16 million middle-class seniors could lack sufficient retirement resources, a direct consequence of a lifetime spent outside homeownership access.
The white-Black homeownership gap has not narrowed in sixty years
In the fourth quarter of 2025, 75.1% of non-Hispanic white households own their homes, compared to 44.2% of Black households, a gap of 30.9 percentage points.
The homeownership gap between white and Black households persists. Income influences savings, credit access, and purchasing power, while housing market conditions vary across territories.
Yet both conditions are now compromised.
According to Fannie Mae’s forecast from June 2026, the 30-year fixed mortgage rate was projected around 6.3% in 2027. In the 2022 Survey of Consumer Finances, median wealth stands at $285,010 for white families and $44,890 for Black families.
Zoning: A regulatory barrier that benefits existing owners
Thomas Philippon’s work focuses notably on barriers to entry in certain American sectors.
Exclusive single-family zoning generally limits the construction of multifamily housing. However, variances, accessory dwelling units, and local reforms can allow for increased density. Its effects on supply and prices depend on local markets.
Discriminatory practices, including redlining, contributed to disparities in credit access, homeownership, and property appreciation between racial groups.
Institutional capital closes the door entirely
Since 2012, institutional investors have increased their acquisitions of single-family homes for rental in certain markets.
Investors can have substantial capital and make quick acquisitions. An all-cash offer can disadvantage a first-time homebuyer in certain transactions, without necessarily preventing their access to homeownership.
The entry of institutional investors can increase rental supply in certain markets. Its effects on homeownership and household wealth depend on local conditions.
Wealth is transmitted, wages less so
Real estate capital constitutes an important channel for intergenerational wealth transmission.
Income influences savings, credit, and purchasing power. Wage gains can also convert into retirement savings, financial assets, or business ownership, including without homeownership.
Twentieth-century housing and credit policies, as well as discriminatory practices, contributed to racial gaps in homeownership and wealth.
States that remove zoning restrictions are beginning to see results
The diagnosis is heavy. Yet there are experiments that allow for calibrating available levers.
Several American states have undertaken significant zoning reforms over the past five years. Minnesota banned single-family zoning statewide in 2023. California adopted a series of laws allowing additional housing construction on existing parcels (“ADU laws”) and facilitating densification around public transit. Oregon was the first state to eliminate exclusively single-family zoning in its major cities, as early as 2019. Montana followed in 2023, a remarkable fact for a Republican-dominated state: restrictive zoning is a problem that transcends partisan divides when local markets become unaffordable.
The effects of zoning reforms depend on their local implementation and the delay between building permits and housing delivery.
These reforms alone are not sufficient. They must be coupled with credit access policies adapted to moderate-income households, targeted down payment assistance programs, and regulation of institutional investment in residential housing. The Urban Institute has recommended combining these three levers for several years. The OECD, in its housing market comparisons, notes that countries that maintained more equitable homeownership rates—Canada, Australia before the recent surge, Germany with its specificities—generally combined more flexible supply with mechanisms regulating speculative demand.
Wage dynamics in the cities most affected show that even skilled workers are beginning to be priced out of urban real estate markets, which broadens the political base for potential reforms beyond historically discriminated communities alone.
A middle class without a wealth safety net: The 2040 horizon
The long-term question is this: can a society maintain a mobile middle class if the primary wealth asset remains closed to the bottom 30% of the distribution?
NORC projects that 16 million seniors with average incomes aged 75 or older will live in the United States in 2033. Their retirement resources depend notably on their income, assets, care needs, and housing costs.
The evolution of the homeownership and wealth gap will depend notably on credit conditions, housing supply, income, savings, and wealth transmission.
Zoning reforms, homeownership assistance, and regulation of institutional acquisitions can influence housing markets, according to their terms and local conditions.
Monitoring building permits, homeownership rates, and institutional purchases can illuminate the effects of reforms across markets.
Racial gaps in homeownership and wealth are documented. Housing is an important asset for many households, among other wealth components.
Sources
- Chandan Economics, 2026 Racial Inequities in US Housing Report, June 2026, https://www.chandan.com/post/2026-racial-inequities-in-us-housing-report
- Thomas Philippon, A Primer on Concentration, Investment and Growth, NYU Stern, https://www.stern.nyu.edu/experience-stern/faculty-research/primer-concentration-and-growth
- NBER Working Paper, Housing Capital and Intergenerational Wealth Transmission, 2026, National Bureau of Economic Research (no verifiable URL)
- Urban Institute, Housing Discrimination and the Racial Homeownership Gap, Urban Institute, Housing Finance Policy Center (no verifiable URL)
- PAHRC Housing Impact Report, Partnership for Advancing Responsible Housing Capital (no verifiable URL)
- Federal Reserve, Survey of Consumer Finances 2022, Federal Reserve Board of Governors (no verifiable URL)
- OECD, Housing Markets and the Economy: A Comparative Overview, OECD Publishing (no verifiable URL)
- California Department of Housing and Community Development, ADU Annual Progress Report, state.ca.gov (no verifiable URL)
- Bank of America Housing, mortgage rate forecasts 2024-2027, Bank of America Global Research (no verifiable URL)
