Wednesday, February 27, 2013

New Study Says Real Estate at the Heart of Wealth Gap

A new study out today from the Institute on Assets and Social Policy has found that the wealth gap between white and black families is primarily the product of real estate and low paying jobs.

Key point:
Despite that progress, the wealth gap between whites and blacks nearly tripled among study participants, going from $85,000 per family in 1985 to $236,500 in 2009. Overall, the median net worth of whites in the study was $265,000 in 2009, compared with $28,500 for blacks. A broader survey done by federal officials has found even larger disparities, with blacks having a nickel of wealth for every dollar of wealth owned by the median white family.
The study found that black families typically bought homes later in life and in areas that did not appreciate in value as much.

What are some of the solutions to closing the gap?  Housing is still a primary driver of wealth growth, so one key remains making sure all Americans have access to responsible, low-cost financing.