Net Worth, Weath Inequality and Homeownership during the Bubble Years
An Assets & Opportunity Special Report

Homeownership as an asset-building strategy for low-income families and communities has come under attack during the current subprime and foreclosure crisis. However, owning a home is still the primary source of wealth for low-income and minority households, and there is evidence that if the opportunity is structured correctly, homeownership remains a very effective way to build wealth.

In the newly released Assets & Opportunity Special Report, CFED examines changes in net worth and the role that homeownership played in household wealth at the onset of the current credit crisis. The Special Report looks at a new wave of data that extends through early 2006 and updates knowledge since CFED’s release of the 2007 2008 Assets and Opportunity Scorecard about what happened to net worth, wealth inequality, home equity and homeownership during the housing bubble years and at the start of the foreclosure crisis. The data in this report tell a story of uneven and inequitable changes in financial security, with low‐ and moderate‐income households being hit the hardest.

Key findings include:

• Net worth grew for the top 60% of households by income, but fell for the bottom 40%.
• Home equity remains the largest component of net worth, especially for low‐income and minority populations.
• Since 2006, falling home values and foreclosures have eroded recent gains in home equity across all populations, especially among low‐income and minority households.

The report also shows that when homeownership is done right ‐ with counseling, fixed‐rate non‐predatory financing and personal savings that create equity and leverage debt – it continues to be one of the most powerful asset‐building opportunities available to help low‐income and minority families stabilize and strengthen the odds of building a brighter economic future.

Access Full Report for In-depth Analysis and Policy Recommendations (pdf)

For the first time in conjunction with the Special Report, CFED is releasing data on net worth by race and income as well as home equity for each state and the District of Columbia. This new data demonstrates the disparities in household wealth among different populations and the crucial role that homeownership plays in creating wealth.

For details on each state, select a state from the menu above.