In the present study, we propose a novel conceptualization of homeownership in the United States as a special commodity, whose consumption involves a two-stage process: homeownership entry wherein the ability to consume is pivotal, and homeownership retention wherein the outcome rests on economic security. Based on the Panel Study of Income Dynamics (PSID), we test this conceptualization with consumption ability being proxied by income and economic security by liquid wealth. Three hypotheses are verified: (1) income predicts first-time renters’ chance of becoming homeowners but has weakened influence on homeownership retention; (2) liquid wealth constitutes the central determinant for first-time homeowners’ ability to avoid going back to renting; and (3) nonliquid wealth fails to exhibit a significant impact on either homeownership stage. By revealing the two separate stages of different homeownership dynamics, this study is the first to systematically explore the built-in contradiction of capitalist housing markets. Policy implications are also discussed.
AnXudongCordellLarryGengLiangLeeKeyoung. 2021. Inequality in the Time of COVID-19: Evidence from Mortgage Delinquency and Forbearance. SSRN Scholarly Paper. ID 3789349. Rochester, NY: Social Science Research Network.
2.
Avery, Robert B., and Michael S. Rendall. 2002. “Lifetime Inheritances of Three Generations of Whites and Blacks.” American Journal of Sociology 107 (5): 1300–46. doi:https://doi.org/10.1086/344840.
3.
BesbrisMax.2016. “Romancing the Home: Emotions and the Interactional Creation of Demand in the Housing Market.” Socio-Economic Review14 (3): 461–82. doi:https://doi.org/10.1093/ser/mww004
4.
BesbrisMaxFaberJacob William. 2017. “Investigating the Relationship Between Real Estate Agents, Segregation, and House Prices: Steering and Upselling in New York State.” Sociological Forum32 (4): 850–73. doi: https://doi.org/10.1111/socf.12378
5.
BoehmThomas P.SchlottmannAlan M.. 2004. “The Dynamics of Race, Income, and Homeownership.” Journal of Urban Economics55 (1): 113–30.doi:https://doi.org/10.1016/j.jue.2003.08.001
6.
BoehmThomas P.SchlottmannAlan M.. 2009. “The Dynamics of Homeownership: Eliminating the Gap Between African American and White Households.” Real Estate Economics37 (4): 599–634. doi:https://doi.org/10.1111/j.1540-6229.2009.00257.x
7.
BrattRachel G.StoneMichael E.HartmanChester W.. 2006. A Right to Housing: Foundation for a New Social Agenda. Philadelphia: Temple University Press.
8.
CharlesKerwin KofiHurstErik. 2002. “The Transition to Home Ownership and the Black-White Wealth Gap.” Review of Economics and Statistics84 (2): 281–97. doi:https://doi.org/10.1162/003465302317411532
9.
ChengSiweiSongXi. 2019. “Linked Lives, Linked Trajectories: Intergenerational Association of Intragenerational Income Mobility.” American Sociological Review84 (6): 1037–68. doi:https://doi.org/10.1177/0003122419884497
10.
ClarkWilliam A. V.2013. “The Aftermath of the General Financial Crisis for the Ownership Society: What Happened to Low-Income Homeowners in the US?” International Journal of Housing Policy13 (3): 227–46. doi:https://doi.org/10.1080/14616718.2013.796811
11.
ClarkWilliam A. V.2019. “Millennials in the Housing Market: The Transition to Ownership in Challenging Contexts.” Housing, Theory and Society36 (2): 206–27. doi:https://doi.org/10.1080/14036096.2018.1510852
12.
ClarkWilliam A. V.DielemanFrans M.. 1996. Households and Housing: Choice and Outcomes in the Housing Market. New Brunswick, NJ: Transaction Publishers.
13.
ConleyDaltonGiffordBrian. 2006. “Home Ownership, Social Insurance, and the Welfare State.” Sociological Forum21 (1): 55. doi:https://doi.org/10.1007/s11206-006-9003-9
14.
CramerReidNewvilleDavid. 2009. Children’s Savings Accounts. Washington, DC: New America Foundation.
15.
DawkinsCasey.2005. “Evidence on the Intergenerational Persistence of Residential Segregation by Race.” Urban Studies42 (3): 545–55. doi:https://doi.org/10.1080/00420980500035725
16.
DeLucaStefanieWoodHollyRosenblattPeter. 2019. “Why Poor Families Move (And Where They Go): Reactive Mobility and Residential Decisions.” City & Community18 (2): 556–93. doi:https://doi.org/10.1111/cico.12386
17.
DiZhu XiaoBelskyEricLiuXiaodong. 2007. “Do Homeowners Achieve More Household Wealth in the Long Run?” Journal of Housing Economics16 (3): 274–90. doi:https://doi.org/10.1016/j.jhe.2007.08.001
18.
DiZhu XiaoLiuXiaodong. 2007. “The Importance of Wealth and Income in the Transition to Homeownership.” Cityscape9 (2): 137–51. https://www.jstor.org/stable/20868621
DwyerRachel E.NeilsonLisa A.NauMichaelHodsonRandy. 2016. “Mortgage Worries: Young Adults and the US Housing Crisis.” Socio-Economic Review14 (3): 483–505. doi:https://doi.org/10.1093/ser/mwv018
22.
EilbottPeterBinkowskiEdward S.. 1985. “The Determinants of SMSA Homeownership Rates.” Journal of Urban Economics17 (3): 293–304. doi:https://doi.org/10.1016/0094-1190(85)90052-X
FarleyReynolds.1996. The New American Reality: Who We Are, How We Got Here, Where We Are Going. New York: Russell Sage Foundation.
25.
FeaginJoe R.1998. The New Urban Paradigm: Critical Perspectives on the City. Lanham, MD: Rowman & Littlefield.
26.
FlippenChenoa.2004. “Unequal Returns to Housing Investments? A Study of Real Housing Appreciation among Black, White, and Hispanic Households.” Social Forces82 (4): 1523–51.doi:https://doi.org/10.1353/sof.2004.0069
27.
FreundDavid M. P. 2010. Colored Property: State Policy and White Racial Politics in Suburban America. Chicago, IL: University of Chicago Press.
28.
FriedlineTerriMasaRainier D.ChowaGina A. N.. 2015. “Transforming Wealth: Using the Inverse Hyperbolic Sine (IHS) and Splines to Predict Youth’s Math Achievement.” Social Science Research49: 264–87. doi:https://doi.org/10.1016/j.ssresearch.2014.08.018
29.
GabrielStuart A.RosenthalStuart S.. 2005. “Homeownership in the 1980s and 1990s: Aggregate Trends and Racial Gaps.” Journal of Urban Economics57 (1): 101–27. doi:https://doi.org/10.1016/j.jue.2004.09.001
GyourkoJosephLinnemanPeter. 1996. “Analysis of the Changing Influences on Traditional Households’ Ownership Patterns.” Journal of Urban Economics39 (3): 318–41. doi:https://doi.org/10.1006/juec.1996.0017
32.
GyourkoJosephLinnemanPeterWachterSusan. 1999. “Analyzing the Relationships among Race, Wealth, and Home Ownership in America.” Journal of Housing Economics8 (2): 63–89. doi:https://doi.org/10.1006/jhec.1999.0242
33.
HallMatthewCrowderKyle. 2011. “Extended-Family Resources and Racial Inequality in the Transition to Homeownership.” Social Science Research40 (6): 1534–46. doi:https://doi.org/10.1016/j.ssresearch.2011.07.002
34.
HaurinDonald R.HerbertChristopher E.RosenthalStuart S.. 2007. “Homeownership Gaps Among Low-Income and Minority Households.” Cityscape9 (2): 5–51. https://www.jstor.org/stable/20868618
35.
HaurinDonald R.RosenthalStuart S.. 2004. The Sustainability of Homeownership: Factors Affecting the Duration of Homeownership and Renatal Spells. Washington, DC US Department of Housing and Urban Development.
36.
HaurinDonald R.RosenthalStuart S.. 2005. “The Growth Earnings of Low Income Households and the Sensitivity of Their Homeownership Choices to Economic and Socio-demographic Shocks: vii.” 10–11.
37.
HerbertChristopher E.BelskyEric S.. 2008. “The Homeownership Experience of Low-Income and Minority Households: A Review and Synthesis of the Literature.” Cityscape10 (2): 5–59. https://www.jstor.org/stable/20868655
38.
HilberChristian A. L.LiuYingchun. 2008. “Explaining the Black–White Homeownership Gap: The Role of Own Wealth, Parental Externalities and Locational Preferences.” Journal of Housing Economics17 (2): 152–74. doi:https://doi.org/10.1016/j.jhe.2008.02.001
39.
HirschlThomas A.RankMark R.. 2010. “Homeownership Across the American Life Course: Estimating the Racial Divide.” Race and Social Problems2 (3–4): 125–36. doi:https://doi.org/10.1007/s12552-010-9033-z
HowellJuniaKorver-GlennElizabeth. 2018. “Neighborhoods, Race, and the Twenty-First-Century Housing Appraisal Industry.” Sociology of Race and Ethnicity4 (4): 473–90. doi:https://doi.org/10.1177/2332649218755178
42.
HowellJuniaKorver-GlennElizabeth. 2020. The Increasing Effect of Neighborhood Racial Composition on Housing Values, 1980–2015. Social Problems 68 (4): 1051–71. doi:https://doi.org/10.1093/socpro/spaa033
43.
ImmergluckDaniel.2011. Foreclosed: High-Risk Lending, Deregulation, and the Undermining of America’s Mortgage Market. Ithaca, NY: Cornell University Press.
44.
KillewaldAlexandraBryanBrielle. 2016. “Does Your Home Make You Wealthy?” RSF: The Russell Sage Foundation Journal of the Social Sciences2 (6): 110–28. doi:https://doi.org/10.7758/rsf.2016.2.6.06
45.
KillewaldAlexandraBryanBrielle. 2018. “Falling Behind: The Role of Inter- and Intragenerational Processes in Widening Racial and Ethnic Wealth Gaps Through Early and Middle Adulthood.” Social Forces97 (2): 705–40. doi:https://doi.org/10.1093/sf/soy060
KrivoLauren J.KaufmanRobert L.. 2004. “Housing and Wealth Inequality: Racial-Ethnic Differences in Home Equity in the United States.” Demography41 (3): 585–605. doi:https://doi.org/10.1353/dem.2004.0023
48.
KueblerMeghanRughJacob S.. 2013. “New Evidence on Racial and Ethnic Disparities in Homeownership in the United States from 2001 to 2010.” Social Science Research42 (5): 1357–74. doi:https://doi.org/10.1016/j.ssresearch.2013.06.004
49.
LoganJohn R.MolotchHarvey LuskinMolotchHarvey. 2007. Urban Fortunes: The Political Economy of Place. Oakland, CA: University of California Press.
50.
MasseyDouglas S.DentonNancy A.. 1993. American Apartheid: Segregation and the Making of the Underclass. Cambridge, MA: Harvard University Press.
51.
McCabeB. J.2013. “Are Homeowners Better Citizens? Homeownership and Community Participation in the United States.” Social Forces91 (3): 929–54. doi:https://doi.org/10.1093/sf/sos185
52.
McCabeBrian J.2018. “Why Buy a Home? Race, Ethnicity, and Homeownership Preferences in the United States.” Sociology of Race and Ethnicity4 (4): 452–72. doi:https://doi.org/10.1177/2332649217753648
53.
McKernanSigne-MaryRatcliffeCarolineVinopalKatie. 2009. Do Assets Help Families Cope with Adverse Events?Washington, DC: Urban Institute.
54.
McKernanSigne-MarySherradenMichael Wayne. 2008. Asset Building and Low-Income Families. Washington, DC: The Urban Institute.
55.
OliverMelvin L.ShapiroThomas M.. 2006. Black Wealth, White Wealth: A New Perspective on Racial Inequality. Oxfordshire, UK: Taylor & Francis.
56.
PainterGaryGabrielStuartMyersDowell. 2001. “Race, Immigrant Status, and Housing Tenure Choice.” Journal of Urban Economics49 (1): 150–67. doi:https://doi.org/10.1006/juec.2000.2188
PenceKaren M.2006. “The Role of Wealth Transformations: An Application to Estimating the Effect of tax Incentives on Saving.” The BE Journal of Economic Analysis & Policy5 (1). doi:https://doi.org/10.2202/1538-0645.1430
59.
PrasadMonica.2012. The Land of Too Much: American Abundance and the Paradox of Poverty. Cambridge, MA: Harvard University Press.
60.
QuerciaRobertoSpaderJonathan. 2008. “Does Homeownership Counseling Affect the Prepayment and Default Behavior of Affordable Mortgage Borrowers?” Journal of Policy Analysis and Management27 (2): 304–25. doi:https://doi.org/10.1002/pam.20326
61.
ReidCarolina Katz. 2005. “Achieving the American dream? A longitudinal analysis of the homeownership experiences of low-income households.”
62.
ReidCarolina K.BocianDebbieLiWeiQuerciaRoberto G.. 2017. “Revisiting the Subprime Crisis: The Dual Mortgage Market and Mortgage Defaults by Race and Ethnicity.” Journal of Urban Affairs39 (4): 469–87. doi:https://doi.org/10.1080/07352166.2016.1255529
63.
RenChunhui. 2020. “A Framework for Explaining Black-White Inequality in Homeownership Sustainability.” Demography57 (4): 1297–1321. doi:https://doi.org/10.1007/s13524-020-00894-4
64.
RenChunhui. 2022. “Vulnerability of Low-Income Homeownership in the United States: An Analysis Based on Household Liquidity.” Journal of Urban Affairs: 1–26. doi: https://doi.org/10.1080/07352166.2022.2075751
65.
RobinsonJohn N.2020. “Making Markets on the Margins: Housing Finance Agencies and the Racial Politics of Credit Expansion.” American Journal of Sociology125 (4): 974–1029. doi:https://doi.org/10.1086/707927
66.
RobinsonJohn N.2021. “Surviving Capitalism: Affordability as a Racial ‘Wage’ in Contemporary Housing Markets.” Social Problems68 (2): 321–39. doi:https://doi.org/10.1093/socpro/spaa078
67.
RothsteinRichard.2017. The Color of Law: A Forgotten History of How Our Government Segregated America. New York: Liveright Publishing.
68.
RughJacob S.MasseyDouglas S.. 2010. “Racial Segregation and the American Foreclosure Crisis.” American Sociological Review75 (5): 629–51. doi:https://doi.org/10.1177/0003122410380
69.
SatterBeryl.2010. Family Properties: Race, Real Estate, and the Exploitation of Black Urban America. New York: Henry Holt and Company.
70.
ShapiroT.MeschedeT.OsoroS.. 2013. The roots of the widening racial wealth gap: Explaining the black-white economic divide. Research and policy brief.
71.
SharpGregoryHallMatthew. 2014. “Emerging Forms of Racial Inequality in Homeownership Exit, 1968–2009.” Social Problems61 (3): 427–47. doi:https://doi.org/10.1525/sp.2014.12161
72.
SharpGregoryWhiteheadEllenHallMatthew. 2020. “Tapped Out? Racial Disparities in Extrahousehold Kin Resources and the Loss of Homeownership.” Demography57 (5): 1903–28. doi:https://doi.org/10.1007/s13524-020-00913-4
73.
SherradenMichael Wayne. 1991. Assets and the Poor. Armonk, NY: M.E. Sharpe.
StoutNoelle.2019. Dispossessed: How Predatory Bureaucracy Foreclosed on the American Middle Class. Oakland, CA: University of California Press.
76.
StuartGuy.2003. Discriminating Risk: The U.S. Mortgage Lending Industry in the Twentieth Century. Ithaca, NY: Cornell University Press.
77.
TaylorKeeanga-Yamahtta.2019. Race for Profit: How Banks and the Real Estate Industry Undermined Black Homeownership. Chapell Hill, NC: UNC Press Books.
78.
TurnerTracy M.LueaHeather. 2009. “Homeownership, Wealth Accumulation and Income Status.” Journal of Housing Economics18 (2): 104–14. doi:https://doi.org/10.1016/j.jhe.2009.04.005
79.
TurnerTracy M.SmithMarc T.. 2009. “Exits from Homeownership: The Effects of Race, Ethnicity, and Income*.” Journal of Regional Science49 (1): 1–32. doi:https://doi.org/10.1111/j.1467-9787.2008.00589.x
80.
Van ZandtShannonRoheWilliam M.. 2011. “The Sustainability of Low-Income Homeownership: The Incidence of Unexpected Costs and Needed Repairs among Low-Income Home Buyers.” Housing Policy Debate21 (2): 317–41. doi:https://doi.org/10.1080/10511482.2011.576525
81.
WesternBruceBloomeDeirdreSosnaudBenjaminTachLaura. 2012. “Economic Insecurity and Social Stratification.” Annual Review of Sociology38 (1): 341–59. doi:https://doi.org/10.1146/annurev-soc-071811-145434
82.
WilliamsRichardNesibaReynoldMcconnellEileen Diaz. 2005. “The Changing Face of Inequality in Home Mortgage Lending.” Social Problems52 (2): 181–208. doi:https://doi.org/10.1525/sp.2005.52.2.181
83.
WoldoffRachael A.2008. “Wealth, Human Capital and Family Across Racial/Ethnic Groups: Integrating Models of Wealth and Locational Attainment.” Urban Studies45 (3): 527–51. doi:https://doi.org/10.1177/0042098007087
84.
YingerJohn.1995. Closed Doors, Opportunities Lost: The Continuing Costs of Housing Discrimination. New York: Russell Sage Foundation.
85.
ZaviscaJane R.2012. Housing the New Russia. Ithaca, NY: Cornell University Press.
86.
ZaviscaJane R.GerberTheodore P.. 2016. “The Socioeconomic, Demographic, and Political Effects of Housing in Comparative Perspective.” Annual Review of Sociology42 (1): 347–67. doi:https://doi.org/10.1146/annurev-soc-081715-074333
Supplementary Material
Please find the following supplemental material available below.
For Open Access articles published under a Creative Commons License, all supplemental material carries the same license as the article it is associated with.
For non-Open Access articles published, all supplemental material carries a non-exclusive license, and permission requests for re-use of supplemental material or any part of supplemental material shall be sent directly to the copyright owner as specified in the copyright notice associated with the article.
