A study has found that minorities and those burdened with student debt tend to purchase a proportionality higher number of lower-priced homes, and that leads to lost wealth accumulation over time, researchers say.

The research was conducted by Jessica Lautz, vice president of demographics and behavioral insights at the National Association of Realtors, and Michael White, a professor with Nottingham Trent University and director of the Centre of the Built Environment.

The authors looked at price differences among home buyers from January 2014 to December 2017, finding that buyers with student debt on average bought homes that cost 18.8% less than those with no student debt. In addition, it was found that Hispanics and Black Americans purchase homes that are worth 11.2% and 10.6% less than those of white Americans.

The study was controlled to ensure a fair comparison regarding household incomes, home sizes, locations and down payment assistance from family and friends.

This apparent purchase price gap can have some long-term implications, possibly even stretching for generations into the future, the authors concluded.

“The current housing affordability crisis has only exacerbated the homeownership gap by race and especially among those with student debt,” Lautz said. “Without policy intervention the homeownership gap will only continue. Unfortunately, the homeownership gap is not only one snapshot in time, but contributes to lost family wealth, which persists into future generations.”

Americans have long seen buying a home as one of the best ways to accumulate wealth over time, but those who purchase lower priced homes are likely to feel housing affordability constraints more than those who go for higher priced homes. Later, they could also lose out when it comes to wealth accumulation, the authors said. In some cases, it may even lead to a multigenerational “cycle of lost wealth”.

The biggest home price purchase difference is between those with and without student debt, the study found. They said the housing shortage that exists currently is likely to exacerbate this, as it will most likely affect entry-level buyers who might find themselves priced out of buying. That could force them to move to more rural areas with fewer job prospects, the authors said, limiting their ability to pay off their student debt.

“If they enter the housing market, student debt holders purchase homes at a price point that may never catch up to their peers through wealth accumulation through housing,’ the researchers said.

Lautz and White recommend a number of policy steps the government should consider taking to try and mitigate this loss of accumulated wealth through homeownership.

Among their recommendations, they say greater financial literacy is needed for people to understand the benefits of homeownership and the potential wealth gains it affords. They also advise student debt holders to refinance those loans if possible, an expansion of mortgage funding through alternative credit scoring models, and increasing public awareness of low down payment and down payment assistance programs.