Brandeis also found that for White families, homeownership represents 39 percent of family wealth; but is 53 percent of Black wealth. Because of historic differences in access to credit, the homeownership rate for White homeowners is also 28 percent higher than the same rate for Black families.
The State of Lending in America and its Impact on U.S. Households (State of Lending, http://rspnsb.li/stateoflending) published earlier by the Center for Responsible Lending cited similar Pew data that found from 2000-2010, Black family wealth dropped 53 percent, and Hispanic families lost 66 percent. By comparison, average White household wealth dropped only 16 percent.
According to the IASP report, “The paradox is that even as homeownership has been the main avenue to building wealth for African-Americans, it has also increased the wealth disparity between Whites and Blacks. . . Wealth in Black families tends to be close to what is needed to cover emergency savings while wealth in White families is well beyond the emergency threshold and can be saved or invested more readily.”
So is a college education still a part of building wealth?
The answer is still yes. But the rising costs of college and mounting student loan debts together lead to more students—both Black and White—leaving school to earn a steady income before graduation. For Black college graduates, 80 percent begin their careers with student debt. For White college grads, the corresponding debt is 64 percent.
Reflecting on these findings, Tatjana Meschede, the report’s co-author observed, “Public policies play a major role in widening the already massive racial wealth gap, and they must play a role in closing it. We should be investing in prosperity and equity. Instead we are advancing toxic inequality. A U-turn is needed.”
(Charlene Crowell is a communications manager with the Center for Responsible Lending. She can be reached at Charlene.firstname.lastname@example.org.)