The National Community Reinvestment Coalition (NCRC) found that currently, Black wealth amounts to only 15% of white wealth. NCRC's 2024 report cites the lack of homeownership as the primary driver of this disparity.
The rate of Black homeownership peaked in the 1960s, during an era when segregation was legally sanctioned. Yet, for most families, their home is the primary way they store and build wealth. As a result, the NCRC has called for policymakers to set a target Black homeownership rate of 60% within the next 20 years.
While homeownership is the biggest key to wealth accumulation, according to the NCRC, other factors can contextualize the Black-white disparity such as inheritances, intergenerational transfers, and support from family and friends. Those may also play major roles in persistent racial inequality because many Black families lack the opportunity to give or receive familial financial support.
That familial support surely comes in handy when saving up cash for a down payment on a home purchase. For that reason, the difference in financial support that Black and White families can provide their children further exacerbates the homeownership gap.
Black families’ inability to establish intergenerational wealth impedes homeownership opportunities, compounding the racial wealth gap. When unexpected emergencies arise, the same difference in support network capacities may mean that when a Black household runs into a crisis, their wealth-building progress comes abruptly undone in ways a similarly situated White family might not.
Over the last decade, Black wealth has become more dependent on home equity, which accounts for two-thirds of net worth growth from 2013 to 2022. This is mainly due to Black households having the largest percentage increase of any group in median net worth during the pandemic era (2019-2022), up 60% to $44,900.
Per the NCRC, this jump in wealth can be attributed to rising property values; between 2013 and 2022, more than 90% of the wealth gains for Black Americans came from homeownership. Home equity now makes up the largest share of Black wealth since the start of the 20th century.
The NCRC states this is indicative of a growing reliance on owning a home as a key method for Black households to accumulate wealth. Close to half of Black net worth came from home equity alone, compared to less than 20% for White households.
Vehicles made up close to 4 times as much of a Black household’s net worth as their White counterparts. The inverse holds for stock ownership, which made up 8% of White wealth but just 2% of Black wealth. Overall, the NCRC report says Black households’ wealth is less diversified and tends to rely more on non-investment property and non-financial assets.
