Homeownership is still widely treated as the clearest route to the American Dream — a path to stability, savings and generational wealth. That promise is real. Owning a home can help families build assets and protect long-term financial security. But public debate about housing policy too often stops at the point of purchase, as if getting the keys is the only difficult part, and everything after that works out naturally. For many, the real test comes after purchase, when mortgage payments, repairs, insurance, taxes and income shocks begin to strain household finances.
That blind spot matters now more than ever as Congress considers the 21st Century ROAD to Housing Act, one of the most ambitious housing packages in decades. Much of the conversation has centered, understandably, on supply: how to build more homes, reduce shortages and expand access to ownership. That matters. But supply is only part of the problem.
Take California: In a state defined by severe housing shortages, extreme home prices and persistent racial gaps in homeownership, the challenge is not just helping families buy homes, but ensuring they can keep up with rising costs. Sustaining homeownership deserves the same attention as expanding access to it.
In a new study, my co-author Sanket Korgaonkar and I examine what happens after households enter homeownership with a mortgage. Using linked property transactions, credit bureau records and voter registration data for North Carolina residents who bought homes between 2007 and 2019, we tracked how borrowers’ finances evolved after purchase.
Our central finding was stark: Even after accounting for credit score, income, property characteristics, borrowers’ financial patterns before and after buying a home and comparing people in the same neighborhood, Black and female homeowners experience greater financial distress than white and male homeowners.
These are not small differences. Black mortgaged homeowners experience substantial increases in both 30-plus-day and 90-plus-day delinquency, relative to white mortgaged homeowners, after purchase. Women with mortgages also see higher rates of 30-plus-day delinquency, though evidence for more severe delinquency is weaker. The underlying reasons are complex. Women and minority borrowers tend to have higher loan-to-value ratios at purchase, and gender and racial pay gaps increase over the life cycle, making even modest financial disruptions harder to absorb.
The strain extends beyond mortgage payments. We find that Black homeowners also accumulate more credit card debt after purchase than white homeowners. At the same time, while White homeowners tend to pay student loans down after buying a home, Black homeowners do so more slowly or not at all. These student loan repayment patterns are mirrored by gender, with women homeowners slowing down student loan repayment relative to men after purchase. The burden of homeownership, in other words, is not confined to the mortgage, but rather spills over into other forms of debt and broader household fragility.
The questions policymakers need to confront are not only about how to help people buy homes, but how to ensure those people can keep them without falling into financial distress. Too often, policymakers are laser-focused on the first half of the equation: expanding access. Our findings point to the other half, when ownership’s fixed costs, repair risks and cash-flow pressures begin to take their toll.
That is why the 21st Century ROAD to Housing Act, led by Sens. Tim Scott and Elizabeth Warren, deserves both praise and scrutiny. The bill gets some things right. Stronger housing counseling could help prospective buyers better understand the full costs of ownership beyond the mortgage — including taxes, insurance, maintenance and financial shocks. Repair and preservation programs also matter. Unexpected repairs can quickly push already-stretched households into high-cost unsecured debt, especially for families with little room for error.
The bill’s efforts to make smaller home loans easier to originate could make a difference, too. In many lower-cost markets, creditworthy buyers are shut out because homeownership is out of reach and the mortgage market has little incentive to serve smaller loans. Making small-dollar mortgages more available could expand access to ownership in a way that better matches the housing stock that many working-class families can afford.
But the larger risk is that a housing agenda focused mainly on supply and access will only address one facet of the problem. New supply can improve affordability and expand opportunity, but access alone is not enough. A serious agenda therefore needs to go further and include post-purchase stabilization: stronger ongoing counseling, emergency repair assistance and mechanisms that help new and first-time homeowners absorb income shocks before a temporary setback becomes delinquency, damaged credit or eventual loss of the home.
Homeownership can still build wealth. But that promise depends on what happens after closing day. Congress should use the 21st Century ROAD to Housing Act not just to help families buy homes, but also to help them keep those homes without sliding into financial distress.
Carlos Fernando Avenancio-León is an assistant professor of finance at the University of California, San Diego, and a nonresident scholar at the Washington Center for Equitable Growth.
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