ANN ARBOR, Mich., Oct. 3 (UPI) -- A new study released on Thursday indicated that although U.S. household incomes declined in 2001, household wealth increased about 10 percent, largely because of higher real estate values.
The study by the University of Michigan Institute for Social Research also found a wide gap between the net worth of black families vs. white families.
The survey, funded by the National Institute on Aging, found overall household net worth increased from $206,000 in 1999 to $226,200 in 2001.
For black families, the figure was $47,300, compared with $266,500 for white families.
"While wealth growth in the form of stocks and IRA holdings had stalled out before the close of last year, home ownership rates rose from 67 percent of families in 1999 to 72 percent in 2001," said economist Frank Stafford, who directs the ISR Panel Study of Income Dynamics, the source of data for the analysis.
During the period, the average net equity of those who owned homes rose from $81,400 to $91,700, Stafford said. But the mean value for home equity among black families fell from $43,300 in 1999 to $40,500 in 2001.
"Rising home ownership rates may have different implications for low-income families and families with higher loan-to-equity ratios," Stafford said.
"If home prices continue to appreciate, black families may realize prospective wealth gains. But the economic recession and weaker labor market might make it more difficult for them to afford mortgage payments and increase the risk of personal bankruptcies and foreclosures."
The biggest wealth gains from 1999 to 2001 were in households headed by those with a college degree or higher.
"Those with higher educations showed an average increase in wealth of 15 percent, compared to a gain of 10 percent and 11 percent among those with high school degrees and some college," Stafford said.
Among households with short-term debt -- including unpaid balances on credit cards, student loans and medical or legal bills -- average debt rose from $11,500 in 1999 to $12,300 per family in 2001.
The latest Commerce Department figures show personal income rose at an annual rate of 0.4 percent in August, down from 7 percent from 1999 to 2000.
