Quarter of Wealth Gap Between Latino-White Households Comes from Housing

A quarter of the wealth gap between white and Latino households stems from housing wealth disparities, reports Zillow. The total wealth of all U.S. Latino households is $1.03 trillion compared to $2.36 trillion for the same number of white households. Latino households have less than half the wealth of white households, and much of the difference boils down to housing disparities. Homeownership for Latino households is lower than white households across every age range, but much of the Latino population is younger and growing. This means that by 2040, the largest increases in homeownership are expected to come from Latino households, says Zillow.

But simply owning a home is only half the picture. Differences in the value of homes also drive the housing disparity, and here the story gets more complex. Latinx households are more heavily concentrated in more expensive markets, greatly over-indexing in the share of population living in California, Texas, and Florida and under-indexing across most of the Midwest, Appalachia and the Deep South. This concentration means that while at a national level the home equity carried by Latinx homeowners may appear to be roughly equal to white homeowners, that is only an illusion. To see the true level of inequity, we must control for geography and look at differences in local home values themselves.

Nationwide, the typical home owned by a Latinx homeowner is worth about 12.8% less than the typical home owned by a white household: $246,300 compared to $282,400. And the gap in major metros is often higher, reaching as high as 35.3% in Los Angeles, widest among the 50 metros analyzed in this work. That gap itself in LA is also slightly misleading, again, because Los Angeles, with such a high proportion of Latinx households to begin with, is also very pricey — skewing overall national figures. The typical home in Los Angeles is worth $766,400, with the typical Latinx-owned home having a value of $581,700 — both far higher than the typical U.S. home value (at the time of this analysis) of about $274,400. The gap in other large metros with large Latinx populations varies widely: 20.1% in San Antonio, 11.8% in New York, and 6.6% in Miami. Pairing this with homeownership gaps yields estimates of the total housing gap as follows.

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