Puget Sound's red-hot housing market may have some unintended consequences according to a new study by Zillow. The real-estate company suggests the rise in home prices and demand are contributing to negative equity among racial groups in the U.S.
"There is really a wedge that we've seen being driven between the 'haves' and 'have-nots,'" said Zillow Chief Economist Dr. Svenja Gudel.
Gudel points out the road to homeownership among minorities is more challenging anyway. But the explosion in the housing market is exacerbating the problem.
Already, homes in black neighborhoods are twice as likely to be underwater as homes in white neighborhoods according to Zillow research.
Nationally, the negative equity rate in the third quarter of 2016 was 10.9%. In Census tracts where the majority of residents are black, the negative equity rate was 20%, while in tracts where most residents are white, the rate was 9.9%.
The Zillow study can be found here.