Racial Disparity in the Ownership and Value of Particular Assets

Last week, JBHE reported on new data on the overall racial wealth gap from the U.S. Census Bureau. (See JBHE post.)

Now we take a took at racial differences in asset ownership and the value of particular assets. In the United States, one of the most important assets is the value of a family’s home. This important asset can be sold or borrowed against to provide funds for college expenses. In 2019, 69.1 percent of all non-Hispanic White families had home equity. For African American families, only 39.4 percent held equity in their homes. This is a huge difference and a major factor in the overall racial wealth gap.

For those families that did have equity in their homes, the average for non-Hispanic Whites was $208,600 compared to $143,000 for Blacks.

More than 80 percent of non-Hispanic White households had savings accounts at banks and other financial institutions. For Blacks, only 67 percent had a savings account. The average amount in these savings accounts for non-Hispanic Whites was $42,480. For Blacks with savings accounts, the average value was $13,800.

Some 26.2 percent of non-Hispanic White households owned stocks or shares in mutual funds, with an average value of $226,300. Less than 10 percent of all Black households held such assets. For the small percentage of Black households who did hold stock or mutual funds shares, the value was significantly below the value of Whites’ assets at $151,800.

Nearly two thirds of householders in non-Hispanic White families had a retirement account compared to 44.9 percent of Blacks. The average value of assets for those who had retirement accounts was $326,100 for non-Hispanic Whites and $135,700 for Blacks.

Nearly 30 percent of all non-Hispanic White households had a net worth of more than $500,000. For Blacks, only 7.4 percent of all households had a net worth of more than $500,000.

These huge racial differences in wealth underscore the need for increased financial aid for Black students seeking higher education.


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