Wealth Gap as Homeownership Dives
by Bill Hayes
In Wealth Gap as Homeownership Dives, Bloomberg Businessweek reports on the link between lower home ownership and growing inequality.
The share of Americans who own homes rose from the mid-1990s through the Internet bubble and peaked at 69.2 percent in 2004. It has steadily fallen ever since to 63.7 percent in the first quarter, the Census Bureau said Tuesday. In the aftermath of the housing crash, tougher lending standards, stagnant wages and rising home prices have posed obstacles to homebuyers.
Homeownership is the single most important buffer against rising inequality, said [New York University economist Edward] Wolff, who reviewed household wealth trends over more than five decades in a December NBER study, “What Happened Over the Great Recession?” Housing generated 63 percent of wealth in 2013 for middle-class families, defined as the middle three fifths, the research shows. That compares with just 8.7 percent for the top 1 percent and 28 percent for the next 19 percent. [more]