Liberal’s Home Loan Policies Destroy Black Wealth. African Americans for decades flocked to Prince George’s County to be part of a phenomenon that has been rare in American history: a community that grew more upscale as it became more black.
The county became a national symbol of the American Dream with a black twist. Families moved into expansive new homes, with rolling lawns, nearby golf courses and, most of all, neighbors who looked like them. In the early 2000s, home prices soared — some well beyond $1 million — allowing many African Americans to build the kind of wealth their elders could only imagine.
But today, the nation’s highest-income majority-black county stands out for a different reason — its residents have lost far more wealth than families in neighboring, majority-white suburbs.
The same reversal of fortune is playing out across the country as black families who worked painstakingly to climb into the middle class are seeing their financial foundation for future generations collapse. Although African Americans have made once-unthinkable political and social gains since the civil rights era, the severe and continuing damage wrought by the downturn — an entire generation of wealth was wiped out — has raised a vexing question: Why don’t black middle-class families enjoy the same level of economic security as their white counterparts?
The problem is not their income but their home. Once a source of wealth, it is now their biggest financial burden.
The Bryants owe just over $560,000 on their house, which they estimate is worth about $80,000 less than that. Since they moved in 2001, their monthly payment has more than doubled to nearly $3,900 a month — a predicament that arose because of an ill-advised refinancing into a loan whose terms the federal government now deems predatory.
The recession and tepid recovery have erased two decades of African American wealth gains. Nationally, the net worth of the typical African American family declined by one-third between 2010 and 2013, according to a Washington Post analysis of the Federal Reserve’s Survey of Consumer Finances, a drop far greater than that of whites or Hispanics.
The top half of African American families — the core of the middle class — is left with less than half of the typical wealth they possessed in 2007.