State of the Dream 2013 | Executive Summary


Executive Summary & Key Facts

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2013 is the 50th anniversary of the March on Washington for Jobs and Freedom. The March — organized by coalition of civil rights, labor, and student groups among others — drew a crowd of 250,000 to the Capitol. At this August 28, 1963 event, Dr. Martin Luther King, Jr. delivered his “I have a dream” speech from the steps of the Lincoln Memorial. In the following years, landmark civil rights legislation, including the Civil Rights Act of 1964 and the Voting Rights Act of 1965, was enacted.

Dr. King devoted the last years of his life to challenging economic injustice and the vast racial economic divide, but his work remains unfinished. Black and Latino families continue to face significant economic disadvantages relative to White families.

With wealth comes security, opportunity, and the ability to pass advantage on to one’s children. Wealth disparities, the legacy of white supremacy in the United States, are among the largest, most persistent, and damaging aspects of racial inequality.


  • The average, or mean, net worth of White families is more than six times higher than the average net worth of Black families, and 5.7 times greater than the average net worth of Latino families.
  • Black and Latino families faced a shocking loss of wealth during the Great Recession. Between 2007 and 2010, the average net wealth of White families decreased by 6.7 percent. By comparison, Black families lost 27.1% of their average net wealth and Latino families lost 41.3 percent.
  • Black and Latino families came out of the Great Recession much more highly leveraged (holding more debt relative to their net assets) than White families. White families on average have a debt burden equal to just 17% of their net worth, while Black and Latino families owe 53% and 58%, respectively.

Our national history of racially discriminatory policies and practices created the racial wealth divide; current policy that ignores its existence perpetuates it and in some cases makes it worse. Federal policies that encourage home ownership as both housing and asset building strategies play a significant role in continuing the wealth divide.

Not only do Black and Latino families have less wealth than White families, but their wealth
is far more likely be tied up in their homes, making it harder to access when they need it.

Large tax expenditures — the home mortgage interest deduction, the deductibility of property taxes, and the exclusion of capital gains taxes on home sales – account for 92 percent of the federal investments encouraging homeownership. More than one-third of the benefit of the largest of these tax expenditures, the home interest mortgage deduction, goes to the top 5 percent of the income distribution.


  • White families hold far more wealth in assets that are easily accessed than do Black and Latino families. White families on average have over 10 times more financial assets (held in bank accounts, stocks, and bonds) than Black and Latino families. 
  • Black and Latino families have far less saved for retirement than White families. White families on average hold over $109,000 in retirement accounts, while Black and Latino families both own just slightly more than $17,000 in their retirement accounts.
  • Housing value is more significant to the wealth of Black and Latino families than it is to White families. Home value accounts for 51.6% of the total assets held by Latino families, 48.6% for Black families, but only 27.9% of the assets of White families on average.

Federal policies that tie wealth building to homeownership helped to bring housing wealth into Black and Latino communities. However, they have left families of color more susceptible to downturns in the housing market, more indebted, and with less financial flexibility. Housing policy should be guided by the principle that housing is a right – whether rental, owner-occupied, or collectively held. Wealth-building policies should be focused on asset building, not just on homeownership, to reach those with the greatest need.


  • Policy should be focused more on treating housing as housing and less on housing as an asset building policy. Housing is a human right. Federal policy should be designed to ensure that all people have adequate housing. 
  • Asset building policy should be designed to reach those who need the most assistance with wealth creation rather than providing the most benefit to families who are rich enough to purchase and own a home. Children’s development accounts, or baby bonds, should be instituted for all children with the largest grants going to children most in need. 
  • Alternative ownership models that build community wealth, not just individual savings and investment, should be encouraged. Cooperatives and worker ownership of businesses can decrease barriers to entrepreneurship and wealth building in communities of color.

We can begin to address the racial wealth divide today by pursuing these recommendations. We must recognize also that eliminating the divide requires a broad range of strategies and will not be accomplished solely through individual effort. In the words of Dr. King, “It’s all right to tell a man to lift himself by his own bootstraps, but it is a cruel jest to say to a bootless man that he ought to lift himself by his own bootstraps.” The persistent racial wealth divide and extreme economic inequality have left too many Americans “bootless.” We must focus our collective energy and federal policies with the utmost urgency on closing the racial wealth divide once and for all. 

Download the full report (pdf)


The Racial Wealth Divide—Why Housing Matters