Household wealth went up during COVID. But Black and Hispanic families are still in debt.

Debt remains the norm for many households of color

by Alejandra O’Connell-Domenech | Dec. 04, 2023

FILE – New Homes dot the landscape in Middlesex Township, Pa., on Thursday, Apr. 19, 2023. Homebuyers who can afford to bypass the highest mortgage rates in two decades are increasingly forgoing financing and paying all cash. Homes purchased entirely with cash accounted for 34.1% of all sales in September, up from 29.5% a year earlier. (AP Photo/Gene J. Puskar, File)

Story at a glance

A new Pew Reseach Center analysis found that overall, American households saw their wealth grow during the pandemic.

Richer families saw their wealth grow the most, the analysis found.

The percentage of Black households in debt was particularly high compared to the national average.

Most U.S. families got wealthier during the COVID-19 pandemic, according to a new Pew Research Center study released Monday.

But wealth gaps existed and persist among different racial and income groups.

The study divides U.S. households into four groups, “poorer,” “more solvent,” “wealthier” and “richer,” with each category representing a quarter of the nation’s population.

According to the report, poorer households ranked in the bottom 25 percent in wealth, while richer households ranked in the top 25 percent. The typical U.S. household had a net worth of $128,200 in 2019 which increased by 30 percent to $166,900 by 2021, the report found.

Households that were already wealthy before the pandemic experienced the biggest gains in wealth throughout the pandemic.

“More solvent” households gained a median of $19,700 in wealth from 2019 to 2021, while “wealthier” households earned an extra $57,800 to their net worth and “richer” households added $172,200.

“Poorer” households had a median net worth of $0 in 2019 and just $500 by 2021, the report found.

But the wide wealth gap between white and Black households remains.

In 2019, the median white household had 13 times as much wealth as a Black household. And by 2021, white households had 9 times as much wealth as Black households, at the median, according to the report.

White households also had five times as much wealth as the median Hispanic households in 2021.

But Asian households had more wealth than White households in 2021, the report states.

The analysis shows that Black households did experience a decrease in overall debt.

In 2019, 29 percent of Black households had no wealth or were in debt. By 2021, that number shrank to 24 percent.

But that percentage is well above the national number. According to the analysis, 11 percent of all U.S. households had no wealth or were in debt in 2021.

During the early months of the pandemic, millions of Americans lost their jobs. But despite the decrease in household incomes, many households experienced a boost in wealth due to federal stimulus payments, a reduction in consumption and rising home prices.