Wealth inequality between whites and blacks in US worsens

The wealth gap between blacks and whites in the US has nearly tripled over the past 25 years, largely due to inequality in home ownership, income, education and inheritances, a new study by Brandeis University reveals.

According to Thomas Shapiro, director of the university's Institute on Assets and Social Policy, which conducted the research, the inequality could be a drag on economic growth for everyone.

The difference in wealth between typical households in each racial group had risen to $236,500 in 2009, from $85,000 in 1984, the study said. By 2009, the median net worth of white families was $265,000, as against only $28,500 for blacks.

Brandeis researchers studied the same set of 1,700 families over the 25-year period to assess how the effect of actual work and school experiences impacted their wealth accumulation.

What they found was that the gap was driven by home ownership and price appreciation was more limited in non-white neighborhoods, making it harder for blacks to build equity.

Further since whites were more likely to have family financial assistance for down payments, they were able to buy homes an average of eight years earlier than black families and make larger upfront payments that lowered interest rates and mortgage costs.