This dissertation examines the black/white homeownership gap by assessing household transitions in and out of homeownership from 1969-2003. Of explicit interest here is not change in the aggregate numbers themselves, but how the underlying process may have changed. By utilizing the residence histories of a national sample of households, I am able to study the dynamics of the homeownership process. The first chapter provides the theoretical framework for the study and an overview of aggregate trends in homeownership. The second chapter describes the racial differences in the probability and timing of transitioning in or out of homeownership and how have these differences changed over time. I find that blacks lag behind whites in terms of making transitions into homeownership and whites are also more likely to remain in spells of owning than blacks. I also find that when racial inequality in homeownership is decomposed into inequalities in rates of homeownership transitions, transitions out of ownership accounts for a significantly larger portion of inequality for later cohorts than earlier cohorts. Thus, the propensity of blacks to return to renting after achieving homeownership contributes to the persisting racial gap in homeownership and wealth. The third chapter examines the determinants of homeownership transitions, particularly the extent to which socioeconomic characteristics account for racial differences in the propensity of transitioning in or out of homeownership. I find that after controlling for socioeconomic characteristics, racial inequalities for the transition into first ownership have diminished across cohorts and for transitions into other ownerships are completely accounted for. However, there has been substantial growth in the effect of race for transitions from ownership back to renting, even after controlling for socioeconomic characteristics. The fourth chapter I simulate the effects of both policy changes which may alter the impact of homeownership transitions and changes in the socioeconomic characteristics of blacks. I find that rather than focusing on changing rates of a single homeownership transition, policy makers should focus on factors which affect the entire system. For example, simulations show that if black income was on average equal to white income, homeownership differences would decline by about 83%.