Black Homeowners Fall Further Behind on Mortgages
This week we talk about the pressure Black homeowners are under and how people are buying more stocks than ever before.
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Hi, Maitane. Black homeowners are seeing a slower recovery than others in the U.S., government data shows. The trend threatens to widen racial gaps in wealth and homeownership.
Before the pandemic, the median Black household already had around eight times less wealth than the average white family, according to the Brookings Institution. Black people were also hit with more layoffs, according to the Labor Department, and the Centers for Disease Control and Prevention says they were twice as likely to die from Covid-19 as white Americans.
Now Black homeowners are coming under more pressure due to the economic conditions the virus created. The share of Black homeowners in forbearance stood at 11% in mid-April, more than double the overall rate and that of white borrowers, according to the Federal Reserve Bank of Philadelphia.
Things have improved for Black homeowners, but more slowly. Between June 2020 and mid-April 2021, the share of Black homeowners in forbearance fell 35%, versus a 43% drop overall.
What happens to many troubled homeowners in the U.S. also hinges on future government policy. The mortgage forbearance program in the March 2020 stimulus bill was only a short-term solution. Now, what is going on in the stock market?
Individual investors in the U.S. are buying more stocks than ever before. Data going back to the 1950s shows stockholdings among U.S. families increased to 41% of their total financial assets in April, the highest level on record.
One of the reasons for the high rate of participation is the increase in value of many stocks over the past year. This comes amid lower volatility and a robust start to the year for the S&P 500 index.
The index has hit 25 records so far in 2021, supported by strong earnings, improving economic data, fiscal stimulus and the Federal Reserve’s easing monetary policy.
Many individual investors are betting on the market through passive investments. Younger ones are turning to social media platforms like TikTok to learn about stocks and options and are increasingly using online brokerages such as Robinhood.
The startup brokerage saw a strong growth in revenue in the first quarter as millions of amateur investors downloaded its app, drawn in by the run-up in meme stocks that became popular in online forums in January.
Interesting, we’ll keep an eye on how small investors change their strategy in the year ahead.
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Meet the team:
Elevate the Conversation is produced by the editorial teams of The Wall Street Journal and Dow Jones Newswires. Here's a little bit more about us, along with our contact information. We'd love to hear from you.
Dieter Holger, Reporter: I have a knack for uncovering values-based investing trends and I’m obsessed with spreadsheets and charts. I really enjoy ‘80s music and skateboarding (but I suck). dieter.holger@wsj.com @dieterholger
Maitane Sardon, Reporter: I have a passion for amplifying the voices of those at the center of stories. I love running on Barcelona’s beaches and binging on chocolate ice-cream to compensate (it’s all about balance). maitane.sardon@wsj.com @sardonmaitane
Catherine Lindsay, Editor: I like breaking down complex ideas and explaining them. On the weekend, you’ll find me wandering the city with my film camera at the ready. catherine.lindsay@wsj.com @CathsLindsay
Tammy Lian, Designer: As a visual producer, I'm always excited by the challenge of creative problem solving. In my spare time, you can usually find me taking care of my ever-growing collection of plants and drinking tea. tammy.lian@wsj.com @violian.tammy