Wealth Gains by Income and Racial/Ethnic Group

Research has consistently shown the importance of the housing sector on the economy and to the long-term social and financial benefits of individual homeowners.

The housing sector accounted for approximately 19% of the total economic activity in 2022. Meanwhile, from an individual’s perspective, owning a home can drastically help people to improve their net worth. According to the U.S. Census Bureau, home equity and retirement accounts represent over 60% of households’ net worth.

Specifically, people can build wealth through homeownership in two ways. First of all, a mortgage is often also considered a forced savings account. A mortgage "forces" people to pay their monthly mortgage payment if they want to keep their property. Each monthly payment pays down the debt held by the borrower. In addition, the value of a home increases over time, and homeowners can build wealth from the price appreciation of their property. Over the last decade, the median-priced home has become worth about $190,000 more. As a result, the net worth of a typical homeowner is about 40 times the net worth of a renter.

However, not everybody has had the same opportunities for homeownership, with many facing more constraints in their effort to become homeowners. Data shows that there are substantial variations and inequalities in homeownership rates across different income and racial/ethnic groups.

Table: Wealth Gains in the Last 5, 7, 10, and 15 Years by Income Group and Racial/Ethnic Group

The majority of low-income households rent, and the homeownership rate for this group is 47%. Nevertheless, the homeownership rate rises to 69% for middle-income and 87% for upper-income households. Compared to a decade ago, however, even fewer low-income households own a home now. Specifically, the homeownership rate for low-income households was 48% in 2011.

Table: Top 10 Areas With the Highest Homeownership Rates for Low Income Households

Moreover, across racial/ethnic groups, the Black homeownership rate continues to be well behind the rate of any other group. At the end of 2022, the homeownership rate for Black Americans was 44.9% compared to 74.5% for white Americans, 61.9% for Asian Americans, and 48.5% for Hispanic Americans. In the meantime, the homeownership rate rose for each of these racial/ethnic groups compared to 10 years ago. But the Black homeownership rate hasn’t kept pace with increases in the other racial/ethnic groups, making the gap even larger between white and Black homeownership rates. Thus, data shows that significantly fewer low-income households and households of color own their home and are able to build wealth compared to other income and racial/ethnic groups.

Table: Top 10 Areas With the Largest Wealth Gains by Racial/Ethnic Group

This analysis looks at how homeownership can be a catalyst for building wealth for households in these groups. NAR computed how people can increase their net worth through homeownership by income level and racial/ethnic group.

Key Findings


  • Low-income owners were able to build $98,900 in wealth in the last decade from home price appreciation only. Middle-income buyers were able to accumulate $122,100 in wealth as their homes appreciated by 68%. Upper-income households have built $150,800 in wealth since 2012.
  • Although Black homeowners experienced the smallest wealth gains among any other racial/ethnic group, these owners were able to accumulate over $115,000 in wealth in the last decade.
  • Along with the wealth gains that these owners were able to accumulate through price appreciation in the last decade, their debt has already dropped by 21%. While many owners were able to refinance and secure a rate lower than 4% during 2021, they may have paid off an even larger amount of their mortgage.

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