Dionne Walsh craves the chance to get her family of six out of their cramped two-bedroom Landover Hills apartment and into a home of their own. With stable jobs and combined incomes of $80,000 a year, she and her husband seem like prime candidates to make it happen.
But so far, legitimate lenders have been kept away by the debt the family accumulated after Walsh left her job in 2001 to care for her children, and the savings that evaporated while they got rid of the debt. The goal of buying a house, a move that Dionne Walsh, 33, believes will give her family long-term economic stability, has been frustratingly elusive.
Dionne Walsh and her husband have a combined annual income of $80,000, but need more savings. The family's goal of owning a home has been elusive.
(Susan Biddle -- The Washington Post)
Video: The Washington Post's Nell Henderson discusses the widening wealth gap between minorities and white families.
"All the lenders are singing the same song at this point," said Walsh, who is black. "We're talking having to save anywhere from $5,000 to $10,000. It's a lot of money, but you don't have any choice."
Walsh's experience parallels a trend seen nationwide over the course of the 2001 recession and the sluggish recovery that has followed, as minority families lost significant ground to whites in terms of household wealth, according to a report to be released today by the Pew Hispanic Center. The widening wealth gap underscores the vast differences in the economic well-being of minority and white families, with minority families having far fewer assets to pay for such major expenses as retirement and college tuition despite strides in narrowing the income gap.
As of 2002, the latest year for which data are available, the median Hispanic household had a net worth of $7,932 and the median black family had $5,998, meaning that half of the households in those groups had less and half had more. The median white family, by contrast, had more than 10 times either amount -- $88,651. Nearly a third of blacks and over a quarter of Hispanic households had zero or negative net worth in 2002, compared with 13 percent of whites.
The net worth of Hispanic and black households fell 27 percent from 1999 through 2001, while white household wealth rose 2 percent during the same period, the survey found. The losses erased many of the gains blacks and Hispanics had made during the boom of the late 1990s, and they left them less of a cushion to ride out future downturns, according to the report. "The recession and jobless recovery had enormous costs," said Roberto Suro, director of the non-partisan Pew Hispanic Center. "They wiped out a lot of gains."
In 1999, before the recession hit, the median Hispanic household had a net worth of $10,495, the median black household had $8,774 and the median white household had $86,370, according to the center. That was a gain since 1996 for every group.
In 2002, white families' median net worth was up $2,281 from 1999 and $13,169 from 1996. Hispanic households' median worth stood at $7,932, $1,000 more than before the boom, but down from 1999. Black families had about $1,000 less than in 1996.
The report was based on Census Bureau surveys in which people were asked about their assets and their debts. Net worth, or wealth, represents the difference between the two. Asian American families were not included in the study, but Rakesh Kochhar, an economist at the Pew Hispanic Center and the report's author, said their wealth levels tend to be above those of blacks and Hispanics but below those of whites.
While black and Hispanic households earn about two-thirds as much money as white households, they tend to have a disproportionately smaller share of assets in the form of savings accounts, stocks, and, perhaps most importantly, homes.