America’s racial wealth gap increased dramatically following the recent housing market collapse, placing black homeowners at severe economic disadvantage, perhaps for generations to come.
A study conducted for the ACLU by the Social Science Research Council, examined data from the longitudinal Panel Study on Income Dynamics concerning black and white households that owned a home at some point between 1999 and 2011.
The report explores the dramatic changes in wealth and home equity for these families over the course of that time period, and predicts how those changes might affect their children and grandchildren.
Key findings include:
- In the recovery, race matters. All households lost wealth at the height of the housing bust and recession, from 2007-2009. But, beginning in 2009, median white household wealth stopped falling as median black household wealth continued to drop. The typical black household lost an additional 13 percent of its wealth between 2009 and 2011.
- Harms will compound and continue into the next generation. By 2031, a typical black household’s wealth is forecast to be nearly 40 percent lower than it would have been without the Great Recession. As a result, the overall wealth disparity between white and black homeowners, which had been forecast to drop to 4.0 by 2031, will instead grow to 4.5.
- Home equity disparities will continue for children and grandchildren. In the absence of the Great Recession, by 2050, the home equity disparity would have been nearly erased for the adult children and grandchildren of survey participants. Given the unequal impacts of the recession, however, white descendants are projected to have 1.6 times the home equity of black descendants.
Chosen excerpts by Job Market Monitor. Read the whole story at A Tale of Two Recoveries: Economic Recoveries for Black and White Homeowners | American Civil Liberties Union.