China’s real estate industry has developed rapidly and urban residents’ housing conditions have been improved greatly since the housing reform initiated in 1998. However, housing inequality has also become increasingly prominent. By the way of internal market, the housing reform which started from 1998 immobilized the housing inequality formed in the period of the planned economy, and enlarged the inequality to some extent in the process of housing reform. Although it is obvious that market factors have impacts on housing inequality, the historical analysis of housing reform in this paper shows that the impact of housing policy and its change process on housing inequality also cannot be ignored.