Carolina Reid

The Promises and Pitfalls of Homeownership

In 1990, as Michael Sherraden was writing Assets for the Poor, the homeownership rate in the United States hovered around 64 percent, and concerns about the vitality of the US housing sector were growing. The 1980s had seen a drop in overall homeowner- ship rates, in part due to stagnant incomes and declining affordability, and the Savings and Loan banking crisis had shaken the public’s and policymakers’ confidence in the financial stability of home mortgage lending institutions. Racial and ethnic gaps in homeownership also loomed large; in 1989, only 42 percent of African Americans and 40 percent of Latinos owned their own home, compared with nearly 70 percent of non- Hispanic whites (Wolff 2001). Thus, the 1990s ushered in a renewed attention to hom- eownership policy, one that produced a wide range of initiatives designed to expand access to credit, and, in particular, to promote homeownership among lower-income and minority families.