For decades, the wealth gap between Black and white Americans has been a persistent reminder of the enduring legacy of systemic racism in the United States. One of the most telling statistics is that the median Black family’s net worth is still only around 12 percent of the median white household. This staggering disparity stems largely from the intergenerational effects of discriminatory government policies and banking practices, particularly in the realm of homeownership, which have disadvantaged Black families for more than a century.

To understand the wealth gap, we must examine the policies that have shaped wealth distribution over the past century. A major factor in wealth accumulation in the U.S. is homeownership, but for much of the 20th century, Black Americans were systematically denied access to the housing market. Beginning in the 1930s, federal programs such as the Home Owners’ Loan Corporation (HOLC) introduced redlining, a practice where neighborhoods with Black residents were marked as "high-risk" for loans, regardless of the residents’ actual financial situation.

The Federal Housing Administration (FHA), created in 1934, reinforced these discriminatory practices by refusing to insure mortgages in and near African American neighborhoods. This effectively barred Black families from obtaining home loans, while white families were given low-interest mortgages, often with government backing, that helped them secure property, build equity, and pass on wealth to future generations.

By 1968, the Fair Housing Act was passed, outlawing housing discrimination based on race. However, by that time, white families had already enjoyed three decades of wealth-building through homeownership. Black families, on the other hand, had been largely excluded from this opportunity. The long-term impact of this exclusion is profound, as homeownership is one of the most significant ways to accumulate and transfer wealth across generations.

Today, the legacy of these practices is starkly visible in the wealth statistics. According to the Federal Reserve's Survey of Consumer Finances, in 2019, the median net worth of white households stood at $188,200, compared to just $24,100 for Black households. These figures reveal that Black families hold just 12.8 percent of the wealth of their white counterparts.

Homeownership is a key contributor to this gap. As of 2020, the U.S. Census Bureau reported that 73.8 percent of white households owned their homes, compared to only 44.1 percent of Black households. The racial disparity in homeownership rates is a critical driver of the wealth gap, as owning a home allows families to build equity, benefit from tax advantages, and pass wealth to the next generation.

A 2020 Brookings Institution study further highlighted the disproportionate impact of this gap. The report found that homes in Black neighborhoods are valued at approximately half the price of those in white neighborhoods, even when accounting for similar property and neighborhood characteristics. This devaluation alone costs Black homeowners an estimated $156 billion in cumulative losses, further compounding the wealth disparity.

While explicit redlining was banned by the Fair Housing Act of 1968, its legacy continues to shape the landscape of wealth and opportunity for Black Americans. Contemporary discriminatory banking practices still hinder Black families from building wealth. Studies by the National Community Reinvestment Coalition (NCRC) reveal that Black and Latino applicants are still more likely to be denied conventional mortgages than their white counterparts, even when controlling for factors such as income and credit scores.

Moreover, predatory lending practices, which disproportionately target Black and Latino communities, have had a devastating effect on Black wealth. During the 2008 financial crisis, Black homeowners were 76 percent more likely than white homeowners to lose their homes to foreclosure, largely due to subprime mortgage loans pushed by banks in Black neighborhoods. The loss of homes—and the wealth tied to them—during the foreclosure crisis wiped out decades of progress for Black families.

The cumulative impact of these policies and practices amounts to trillions of dollars in missing intergenerational wealth for Black families. A 2019 McKinsey & Company report estimates that closing the racial wealth gap could add between $1 trillion and $1.5 trillion to the U.S. economy by 2028. This figure highlights not only the economic cost of the racial wealth gap but also the potential benefits of addressing it.

Intergenerational wealth plays a crucial role in shaping economic opportunity. For many white families, wealth accumulated through homeownership, investments, and other assets is passed down, providing younger generations with a financial cushion for education, home purchases, and retirement savings. In contrast, Black families are often starting from scratch, having been systematically denied the ability to build and transfer wealth.

Addressing the racial wealth gap requires comprehensive policy changes and sustained efforts to dismantle systemic barriers to wealth-building for Black families. Several measures could begin to close the gap, including:

1. Reparations: Some scholars and activists argue for reparations for descendants of enslaved Africans as a way to address the historical wrongs that have contributed to the wealth gap. The estimated cost of reparations varies, but experts like William Darity, professor of public policy at Duke University, suggest it could be as high as $10 to $12 trillion.

2. Affordable Housing Programs: Expanding access to affordable housing and offering incentives for first-time homebuyers in historically marginalized communities could help close the gap. Additionally, reforming the mortgage industry to ensure fair lending practices is critical.

3. Education and Financial Literacy: Investing in education and financial literacy programs for Black communities is essential to help individuals navigate the complexities of homeownership, credit, and investments.

4. Debt Relief: Many Black families are burdened by disproportionate levels of student loan debt. Addressing student debt through relief programs could provide significant economic relief and free up resources for wealth-building.

The racial wealth gap isn't just a statistic; it's a result of years of systemic discrimination that have held back communities, particularly Black ones. But we need to recognize that it isn't hopeless. By focusing on fairness in housing, banking, and education, and adopting policies that genuinely support wealth-building in Black communities, we can start to change these long-standing issues.

As a nation, we’re facing our history of racial injustice, and closing the racial wealth gap is a vital step toward achieving real economic equality. The trillions of dollars in lost wealth symbolize much more than missing money—they represent generations of missed chances, safety, and growth. To truly create a more inclusive and fair future for everyone, we must tackle these deep-rooted inequalities head-on.

Here's a list of resources that can help individuals, families, and communities take action toward closing the racial wealth gap and supporting economic equity. Whether you want to get involved in advocacy, educate yourself, or support organizations making a difference, these resources offer practical ways to help.

1. Support Affordable Housing and Homeownership Initiatives

• Neighborhood Assistance Corporation of America (NACA):
  Offers affordable homeownership opportunities to low- and moderate-income individuals, particularly in minority communities.
  NACA Website

• Habitat for Humanity:
  Helps families build and improve places to call home. You can volunteer, donate, or support their affordable housing efforts.
  Habitat for Humanity Website

2. Invest in Black-Owned Businesses

• Buy From A Black Woman:
  A nonprofit empowering Black women business owners through grants, education, and advocacy. The site includes a directory of Black-owned businesses to support.
  Buy From A Black Woman Website

• WeBuyBlack:
  An online marketplace for Black-owned businesses, allowing you to shop with purpose.
  WeBuyBlack Website

3. Support Financial Literacy and Education Programs

• Operation HOPE:
  A nonprofit that provides financial literacy education and economic empowerment programs in underserved communities, including free financial coaching, credit counseling, and small business support.
  Operation HOPE Website

• National Endowment for Financial Education (NEFE):
  Offers free resources to improve financial well-being through education, with special programs targeting underserved communities.
  NEFE Website

4. Advocate for Fair Lending Practices and Policy Reform

• National Community Reinvestment Coalition (NCRC):
  Works to promote fair access to banking, credit, housing, and jobs for underserved communities. You can get involved by participating in campaigns, supporting legislation, or advocating for fair lending practices.
  NCRC Website

• Color of Change:
  A racial justice organization that runs campaigns to hold financial institutions accountable for discriminatory practices. You can join their campaigns and advocate for policy change.
  Color of Change Website

5. Get Involved in Racial Wealth Gap Advocacy

• Prosperity Now (formerly CFED):
  Works to advance racial equity and economic mobility by promoting policies that support savings, homeownership, and wealth-building for underserved communities.
  Prosperity Now Website

• The Movement for Black Lives (M4BL):
  Advocates for reparations and policies aimed at closing the racial wealth gap. You can join the movement by supporting their campaigns or donating to their cause.
  M4BL Website

6. Use Your Vote to Support Equitable Policies

• Vote.org:
  Ensure you're registered to vote and learn more about candidates who support policies for racial justice, economic equity, and fair housing. Voting is one of the most direct ways to make systemic change.
  Vote.org Website

7. Participate in Reparations Advocacy

• Reparations National Coalition (RNC):
  Advocates for reparations for the descendants of enslaved Africans and helps drive local and national policy changes. You can participate by supporting legislation and local efforts.
  RNC Website

• The National African American Reparations Commission (NAARC):
  A group of advocates and experts dedicated to advancing reparations legislation and public education. Support their work through donations or joining advocacy campaigns.
  NAARC Website

8. Support Education and Job Training for Black Communities

• UNCF (United Negro College Fund):
  Provides scholarships and financial support to Black students pursuing higher education, helping to bridge the education gap that contributes to the wealth gap.
  UNCF Website

• Year Up:
  A national organization that provides job training and internships for young adults in underserved communities, helping to bridge the opportunity divide.
  Year Up Website

9. Donate to Racial Equity and Wealth-Building Organizations

• NAACP Legal Defense and Educational Fund (LDF):
  Supports litigation and advocacy to combat racial inequality, including economic justice.
  LDF Website

• Equal Justice Initiative (EJI):
  Advocates for racial and economic justice and provides legal representation to underserved communities.
  EJI Website

10. Educate Yourself and Spread Awareness

• The Racial Wealth Gap Learning Simulation by Bread for the World:
  A tool that helps individuals understand the historical policies that have contributed to the racial wealth gap.
  Racial Wealth Gap Simulation

• Books to Read:

  • The Color of Money: Black Banks and the Racial Wealth Gap by Mehrsa Baradaran

  • The Color of Law: A Forgotten History of How Our Government Segregated America by Richard Rothstein

  • The Black Tax: The Cost of Being Black in America by Shawn D. Rochester

These resources offer multiple ways to engage in meaningful action, from educating yourself and others, supporting Black-owned businesses, and advocating for policy changes to help bridge the racial wealth gap.