Housing Loss and Asset Depletion in the Wake of the Great Recession: Uneven Impacts By Race and Gender

Background/Purpose: As the new administration levels threats at the social safety net, the CFPB, and Dodd-Frank, conversations regarding household recovery after the Recession are dwindling. The financial consequences of the Recession carry nontrivial impacts on the lives of American families, particularly for older adults entering their retirement years. The purpose of this paper is to renew our conversation of implications of considerable asset depletion and housing loss experienced by older adults. We ask, “For older adult homeowners, were there disproportionate losses of assets dependent upon race, gender, and ethnicity during the recession and recovery period?” Based on prior research capturing how older women of color were targeted with predatory financial products, we hypothesized that older adult women of color would have the largest losses of assets.

Methods: Using the Health and Retirement Study, we employ a nationally representative sample to trace the financial assets of single homeowners aged 61 to 66 years. Logistic regression was used to test effects of race, gender, and ethnicity on change in total reported wealth (HwATOTB) from 2006 to 2014. Other covariates included reported mortgage trouble, highest education, current employment status, and household income measured in 2014.

Results: Descriptive findings reveal changes in wealth from before the housing crisis (2006) through the end of the Great Recession (2014) as follows: White men (+2%); Black men (-56%); Other men (-100%); Latino men (-26%); White women (-10%); Black women (-21%); Other women (-50%); and, Latina women (-24%). With White men as the reference group, logistic regression results indicate Black men were 241% more likely to lose 50% or more wealth (p = .000), White women were 172% more likely to lose 50% or more wealth (p=.000), Black women were 908% more likely to lose 50% or more wealth (p=.000), and Latina women were 96% more likely to lose 50% or more wealth (p= .000) from 2006 to 2014. Individuals reporting higher educational attainment were significantly less likely to report 50% or more wealth loss, as were those with higher incomes. Individuals who had mortgage trouble in the prior two years were 262% more likely to lose 50% or more wealth (p=.000).

Conclusions: Findings indicate that women, particularly women of color, fared far worse in the Recession and recovery period than other single older adult homeowners. Given that the home equity held by Black female homeowners provides an anchor of economic stability within many financially fragile networks, these results may indicate a trend of downward economic mobility that will persist well beyond the formal conclusion of the Recession. The additional findings that Black men fare worse than White men, and that those who reported falling behind on mortgage payments in the past two years, fared worse than those who did not, suggests that housing loss disproportionately impacted households of color, and those assets have not been recovered. These results beseech renewed attention to the devastating financial impacts of the Recession that continue to undermine financial security for older adults of color and those who depend on them.