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The Asset Building Program’s analysis of the President’s FY 2013 budget reveals two key trends about the and its relationship to overall wealth over the past few years. First, the benefits of the2013 federal budget’s investment in homeownership, which are delivered primarily through tax deductions, accrue chiefly to those who already have high incomes and substantial assets. Second, the housing crisis disproportionately affected black and Hispanic families, significantly widening the racial wealth gap and creating further barriers to savings and economic mobility.

Owning a home has been the most direct and accessible way to . Presumably in recognition of this principle, the FY 2013 federal budget devotes over a third of its total asset spending to homeownership. However, of the nearly $200 billion dedicated to supporting homeownership, over half is a result of the . Taxpayers making over $50,000 a year file the vast majority of returns claiming the mortgage interest deduction, and around half of the total benefits of the deduction go to those making over $200,000. Another $22 billion of the federal budget’s homeownership allocation reflects the deductibility of property tax, while $23 billion comes from the on home sales.

By contrast, a mere $86 million is budgeted for , an organization that offers foreclosure mitigation counseling and helps more families avoid losing their homes. Likewise, only $45 million is provided for housing counseling assistance, despite recent reports forecasting that will over the next year.

With respect to the recession’s impact on racial equity, black and Hispanic families lost a far greater proportion of their net worth from 2005 to 2009 than white families. While the was already a serious issue before the recession, the housing crisis has because an especially high proportion of the losses faced by black and Hispanic families were losses in the equity value of the home. For Hispanic families, for example, of the 66% of their net worth lost during the recession, 96% resulted from declining home values.

Thus, while the housing market people of color through zoning, restrictive covenants, and formal , the most recent crisis reveals that lending practices that were have yielded functionally similar consequences. Foreclosures have stripped black and Hispanic families of assets that took decades to build—and the results for racial wealth disparities are dramatic. For example, theheld by white families compared to black families has grown from 12:1 in 1984 to 19:1 in 2009, briefly reaching a low of 7:1 in 1995. In other words, in the wake of the housing crisis, for every dollar held by a white family, the average black family has a nickel. We hardly live in a society.

NAF proposes a variety of solutions to address some of the inequities in homeownership and access identified in the Assets Report. First, provide greater support for and other alternatives to foreclosure toon struggling families. Second, increase the accessibility of homeownership through the development of . Finally, promote , which would allow families receiving housing assistance to divert a portion of their rent into a savings account that could be used for a down payment on a home, among other purposes. While the scope of housing inequity is great, these policy interventions would be first steps toward promoting more universal access to homeownership.