Wealth Divide Will Likely Widen After Pandemic
June 23, 2020
Job losses mounting from the coronavirus pandemic have disproportionately affected low-income and Black workers, a new report from the real estate brokerage Redfin finds.
The unemployment rate for Black families has been three points higher than the rate for White families, but has since doubled to six points during the pandemic. Meanwhile, home buyers with secure, high-paying jobs are moving quickly to take advantage of low mortgage rates to get into homeownership. The result will undoubtedly be growth in the nation’s wealth gap, the report states.
“With the rapid increase in housing prices over the past several years, it’s been increasingly difficult for many Americans to afford the American dream,” says Adam Wiener, Redfin’s chief growth officer. “With job losses disproportionately affecting people with lower incomes, unemployment hasn’t had much effect on home buying demand yet.”
When much of the nation shut down in an effort to slow the spread of the coronavirus, tech workers and those with other white-collar office jobs were largely able to work remotely. The majority of those workers also tend to be White, the report notes. The Americans who have struggled the most during this current recession are those with low-income jobs in industries like the service and hospitality industries, which are disproportionately made up of minority groups.
“They had largely already been priced out of the housing market even before the economy stalled,” the Redfin report notes. “The pain of the coronavirus recession is likely to be over relatively quickly for the economically privileged, even in areas where unemployment has soared.”
The persisting racial divide is likely to grow, the report notes. “This disparity highlights the need for serious action to address systemic racial inequality in housing and the economy as a whole,” the report says. “Unless the government takes aggressive, proactive steps to counteract the unequal impact this recession is already having on Black families, it is likely that the homeownership and wealth gaps will increase even more, continuing the pattern that followed the Great Recession.”
“Homebuying Demand Rebound Amid Coronavirus Recession Highlights Wealth Divide,” Redfin (June 22, 2020)
Updated: August 11, 2020