NEW YORK (MainStreet) — The wealth gap between whites and minorities grew to record levels during the recession as black and Hispanic households were hit particularly hard by the collapse of the housing market.
The median wealth of white households in 2009 was $113,149, roughly 20 times the median wealth of black households and 18 times the wealth of Hispanic households, according to an analysis of census data by the Pew Research Center. This marks the largest wealth gap in the 25 years such data has been collected.
As the data show, white households did lose some of their wealth during the recession, but they did not suffer nearly as steep a drop as minority households. Between 2005 and 2009, at the tail end of the recession, the median wealth of Hispanic households dropped to just $6,325 from $18,359, or about a third of what it what it once was. Likewise, the wealth of black households was effectively halved in these years, dropping to $5,677 from $12,124. White households, on the other hand, saw their wealth decline by about $21,000, a loss of roughly 15%.
For all three groups, much of the wealth decline has to do with the turbulent housing market. Home equity accounted for the majority of the net worth for black and Hispanic households, with the latter being slightly more financially dependent on the value of their homes. But between 2005 and 2009, black households saw the value of their home equity drop to $59,000 from $76,910, while the value of home equity held by Hispanics was halved to less than $50,000.
White households experienced a fairly significant decline in home equity as well – with housing values dropping from $115,364 in 2005 to $95,000 in 2009 – but home equity accounted for less than half of their total wealth, meaning they had other assets such as savings, stocks and retirement accounts to offset some of the loss.