The incidence of homeownership is examined in an analysis of local real estate markets that parses the causal relationships among labor market conditions, education, family structure, income, housing costs and the amenity value of homeownership.  Inequality in the distribution of income in the housing market is found to have a negative impact on homeownership. This effect is thought to result from a disruption of the normal progression from rental housing to homeownership. The policy implications of this finding are explored.