As housing market rebounds, housing equality suffers

For decades, the U.S. housing market was seen as an instrument of upward mobility. In the post-crash years, however, the housing market has exacerbated the economy’s growing wealth inequality.

Home prices are at or near record highs in many cities, but the biggest benefits are accruing to the wealthy, housing economists say.

“Middle-class families are becoming increasingly priced out of homeownership,” Nela Richardson, economist at Seattle brokerage Redfin, said Friday during a conference of the National Association of Real Estate Editors. “Home equity is at all-time highs, and yet we’re at 50-year lows in terms of homeownership. What that means is that the pie is getting bigger, and there are fewer slices.”

National Association of Realtors chief economist Lawrence Yun agreed. While Americans’ home equity is worth $13 trillion, that wealth is becoming more concentrated.

“Homeowners are much healthier,” Yun said. “But the problem is the number of homeowners aren’t rising.”

Housing wealth is unequally spread by geography, by income, and by race, with higher-income Americans in expensive cities getting the biggest benefits.

“When we look at affordability by race, we see a new reality of two markets, and a new deepening of homeownership inequality,” Richardson said. “… All of that points to a housing market that is rapidly changing and not serving the middle class in the same way it has historically.”

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