This study contributes to the growing body of literature on the multifaceted consequences of homeownership for households and their communities, which has seldom focused on neighbourhood satisfaction, an important predictor of neighbourhood quality. Existing studies on the relationship between homeownership and neighbourhood satisfaction have not considered whether homeownership varies in its consequences depending on local context or racial background. Homeownership may render residents more responsive to neighbourhood conditions, to their benefit and to their detriment, depending on local context. Patterns may further vary across racial groups, given vast interracial inequalities in the attainment of desirable neighbourhood outcomes and homeownership. Employing a sample of 1897 respondents from the 2001 Los Angeles Family and Neighborhood Survey (LAFANS), as well as data from the 2000 Census, this study uncovers a complex set of interrelationships among homeownership, neighbourhood characteristics and race. Homeownership makes residents more sensitive to the desirability of local characteristics, proving beneficial in advantaged communities and disadvantageous in distressed communities. These conclusions are broadly applicable to blacks, Latinos and whites, though homeownership is more salient among blacks and Latinos in determining their response to neighbourhood conditions. Given differential access to desirable neighbourhoods and asset accumulation across racial groups, findings raise new and important questions regarding the meaning of homeownership for minority households and their communities.