The sustainability of low-income homeownership: The incidence of unexpected costs and needed repairs among low-income homebuyers

Abstract

Until the recent housing market crisis, the United States was producing first-time, low-income homeowners at an unprecedented rate. In a longitudinal study of low-income renters participating in a multi-site homeownership education program, we examine the ability of low-income homebuyers to pay housing-related costs after home purchase, including maintenance or repairs costs. After less than two years of ownership, we find the sustainability of low-income homeownership in jeopardy for sizeable portion of homebuyers. About half of the more than 350 new homeowners surveyed face unexpected costs, and about a third confront home repairs they cannot afford. More than half carry greater nonhousing debt, and about a quarter were 30 days late or more in debt repayment. The findings raise concerns about the long-term sustainability of low-income homeownership and emphasize the importance of requiring effective prepurchase services and effective and ongoing postpurchase counseling.