CLOSING THE RACIAL WEALTH GAP

In the United States, the typical Black or Hispanic household has less than one-fifth the wealth of the typical white household. The racial homeownership gap is the difference between the percentage of Non-Hispanic White households that own their homes and the percentage of households of other races/ethnicities that own their homes. The racial wealth gap is the result of many factors, most, if not all, of which are rooted in our country’s legacy of systemic racism.  Households of color have lower incomes on average than white households, they are also less likely to benefit from intergenerational wealth transfers (e.g. inheritances and financial gifts from parents or grandparents), and they are less likely than white households to own the home they live in. Homeownership is the primary means by which middle class households in the US build wealth.  Therefore, closing the racial homeownership gap by increasing the percentage of Black and Hispanic households that own their homes is critical to making the distribution of wealth more fair.