The dynamics of race, income, and homeownership

This paper treats household decisions regarding homeownership as a dynamic process rather than a static phenomenon. The analysis employs a duration model of the sequential housing choices made by families to examine the adjustment of their housing tenure over time. This model of housing choice is estimated for the nine-year period 1984 to 1992 utilizing the Panel Study of Income Dynamics (PSID). Particularly for lower income and minority families, the analysis finds that these households achieve homeownership more slowly, they are less likely to maintain this status, and they are less able to move up to “better” units over time.