Racial differences in home ownership and home equity among preretirement-aged households.

This article measures the racial disparities in home ownership and home equity among preretirement-aged households. It computes the proportion of the racial gap explained by discrimination in housing and credit markets. Maximum likelihood and nonlinear least squares estimates are obtained for models of home ownership probabilities and home equity, conditional on home ownership, yielding computations for expected home equity for black and white households. The results reveal an average discriminatory gap in expected home equity as a percent of the actual gap of 55%. In the top third of the family income distribution, the measured discriminatory gap is 82%; in the middle third it is 83%; in the lowest third it is 62%.