Here’s where homeowner inequality is starkest… and where it’s more livable

Inequality in homeownership has grown over the past few decades, but there are significant regional disparities, according to an analysis from Trulia out Thursday.

Trulia defines ownership inequality as the difference between how many people in the top third of incomes are homeowners, compared to the same number in the bottom third.

The housing markets with the smallest gap are what Trulia Economist Felipe Chacón calls “smaller metros that are often located just outside of larger metros. Many have slightly older populations and serve partially as bedroom communities to big economic hubs.” Think of Montgomery and Bucks counties in Pennsylvania, or Troy, Michigan, as examples.

Another factor that helps ease inequality is a wider variation in home values. “This could be because people of different income-levels are more likely to be able to find a suitable home to purchase in a place where the housing stock has more variation,” Chacón wrote.

What causes housing markets to be less equal? Metros with less variation in home prices, higher income inequality, and greater churn, defined as people moving every five years or less, Chacón wrote—popular areas like the West Coast and the Northeast.

Less variation in home prices may not just mean that would-be owners can find homes across a wider spectrum of prices. It also likely means that those markets are hardest for low-income households to compete in.

Also read: The financial and housing market rescue left many Americans behind

The variations among local housing markets are stark. In Deltona, Florida, for example, the gap is 1.9 times—meaning wealthy households own 1.9 times as often as households in the bottom third. In Los Angeles and New York, that spread is more than doubled: the top third of incomes own 4.2 and 4.4 times as much as the bottom third.

Trulia has mapped 100 of the biggest metros and identified their inequality ratio in a blog post about this analysis.

The overall national trend is improving, Chacon noted. It’s dropped to 2.3 times from 2.4 times. And inequality matters: while homeownership may not be right for everyone, it’s still one of the most reliable paths to wealth accumulation.

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