Wealth in America by race / ethnicity: very recent trends

The Federal Reserve reports on the growth and distribution of wealth from 2019 through 2022, drawing from the 2022 Survey of Consumer Finances (SCF).  Note the relatively very high wealth of Asian households.  I have found no reliable analysis of why Asians are so wealthy. In the past 10 – 20 years, new Asian immigrants are far better educated that white and other groups in the U.S. which may have translated into higher incomes allowing for housing purchases and equity investments.

Two dominant drivers of wealth since the Great Recession are the stock market (Dow Jones 10/2009 was under $14,000, now over $33,000) and housing prices (median price October 2009 $214,000; October 2023, $416,000).  Any household who new ability to buy a home or invest in stocks rode these waves.  

I have posted on the economic rise of Hispanic households (here and here) and the educational powerhouse of Asians (here).



From the Fed’s report

[On real wealth—the difference between assets and liabilities in 2022]. Median wealth (the amount held by a typical family, shown in the top panel) among White families was $285,000 in 2022. By comparison, the typical Asian family—who we can split out for the first time in 2022 because of an oversample of certain non-White groups—held $536,000, nearly twice that of the typical White family. Meanwhile, the wealth of the typical Black family ($44,900) was only about 15 percent of the typical White family. The typical Hispanic family similarly held only about 20 percent of the wealth of the typical White family (about $61,600).

Between 2019 and 2022, wealth for the typical Black family rose 61 percent and for the typical Hispanic family it rose 47 percent….while the typical White family saw a 31 percent increase. However, despite faster growth in wealth for the typical Black and Hispanic family, the absolute dollar-value differences in wealth between the typical White and the typical Black and Hispanic family grew in 2022 because the typical Black and Hispanic family had less wealth in 2019. Both the White-Black and the White-Hispanic median wealth gaps increased by around $50,000 between 2019 and 2022, with each gap reaching over $220,000 in 2022.

Since the Great Recession the typical Black and Hispanic family has had between about $10 to $15 of wealth for every $100 held by the typical White family (Figure 3). This ratio has closed only modestly in the past two surveys. The typical Black family went from having about $9 in wealth for every $100 held by the typical White family in 2013 to around $16 in 2022; the typical Hispanic family went from having about $10 in wealth for every $100 held by the typical White family in 2013 to around $22 in 2022.

Most notable is the increase in net housing wealth—the market value of a family’s home minus any outstanding loans secured by the home—among all groups, but particularly for Black and Hispanic families. In part, the larger increase for Black and Hispanic families reflects the fact that these families tend to have higher leverage ratios, which amplifies the effect of rising prices on wealth, though it also reflects an increase in homeownership rates among these families.

Black and Hispanic families the gains in wealth were concentrated in housing, which is somewhat illiquid and may not be as useful as liquid wealth for covering recurring expenses. As shown in Figure 4, real average liquid wealth, which includes assets such as cash, checking, and savings accounts, did not grow much for Hispanic families and fell for Black families.

[Summary] Overall, the SCF depicts a complex account of families’ finances and disparities across race and ethnicity. Broad-based gains in wealth across race and ethnicity have narrowed wealth ratios somewhat over the past three years, but income ratios widened slightly. In particular, incomes for non-White families were propped up by temporary sources, like government support, that have ended, with real wages stagnant, on average, for Black and Hispanic families. While most families were able to meet their required payments, families, especially non-White families, have grown more pessimistic and uncertain about the current and future state of both their own finances and the economy. The recent improvements in wealth ratios across races is promising, but families’ increased financial uncertainty suggests continued improvements may not persist in the future.

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