One of the most pressing economic problems in the United States since the Great Recession has been the widening racial wealth gap. In the lead-up to the financial crisis, economic opportunity remained unequal across racial lines, but economic trends suggested that America was on a path toward narrowing the yawning wealth disparities between white and black families. Deeply rooted economic inequality, however, fueled some of the most harmful lending practices in the housing market, allowing financial institutions to engage in discriminatory and predatory lending that accelerated the financial collapse. It is clear, when we look back, that racial discrimination played a pivotal role in the housing market crash.

This report looks forward. Commissioned by the American Civil Liberties Union and drawing on a unique dataset, it examines the likely effect of the financial crisis on the racial wealth gap for the next generation. What it uncovers is a tale of two recoveries: among families that owned homes, white households have started to rebound from the worst effects of the Great Recession while black households are still struggling to make up lost ground. The racial wealth gap is now on track to compound over time, a trend with urgent implications for the future of racial justice in America, and one that should inform policymaking strategies aimed at guaranteeing fair economic opportunities in the coming years.