Categorized | Finance

New Study Shows Renters Lost Wealth During Great Recession

A new report issued by the Center for Social Development (CSD) in the Brown School at Washington University in St. Louis shows that American homeowners kept most of their wealth during the Great Recession.  Those that rented on the other hand, suffered great losses during the period.

“The proportion of homeowners who lost net worth was larger than the proportion of renters who did so; however, renters were more likely than owners to lose at least 25 percent of their net worth during this time,” said lead author Michal Grinstein-Weiss, PhD.  The study, Homeownership, the Great Recession, and Wealth: Evidence From the Survey of Consumer Finances,” appears in the journal Housing Policy Debate.

SOme interesting observations resulted from the report.  While many of the homeowners did lose net wealth during the time period as compared to renters, the report found that renters lost more wealth overall, up to 25%.  The findings showed a difference in each household depending on if it was owned or rented.

Ethnic groups were also scrutinized during the study which showed similar losses of net worth across groups.  Hispanics were reported to have a 32% loss in net worth while African-Americans just slightly below at 31%.  White Americans were the lowest in net worth loss at just 15% drop as found in the study.

According to Grinstein-Weiss, “About a third of black households lost at least half of their 2007 net worth, and almost half lost at least 25 percent of their 2007 net worth.  The proportions with such losses were substantially higher among black homeowners than among those in the other groups.”

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