Wealth compounds across generations. A parent who helps with a down payment or college tuition passes along an advantage that keeps growing. In 2019, nearly 30 percent of white families reported receiving an inheritance or gift, compared with about 10 percent of Black families, according to the Federal Reserve. White families who inherited also tended to receive more.
The gap was built by policy. Formerly enslaved people were denied land after the Civil War. Redlining and the GI Bill's unequal administration kept many Black families from buying homes in the mid-1900s, when home equity became the main source of middle-class wealth. Urban renewal, highway building and the loss of Black-owned farmland stripped away assets that did exist.
The result shows in the numbers. In 2022, the median white household held $285,000 in wealth, compared with $44,900 for the median Black household, according to the Federal Reserve's Survey of Consumer Finances. Proposals like reparations and baby bonds aim to address the gap directly.