Home is Where The Hardship is. Gender and Wealth (Dis)Accumulation in the Subprime Boom

Abstract

Subprime lending has become the penultimate case study for critics of the recent period of financialization, or neo-liberalism more broadly, because it exposes the most profligate tendencies of predatory lending and the pernicious social costs visited on society's most vulnerable groups. This article builds on the social stratification and wealth accumulation literature. We assess how mounting debt levels and crippling costs of servicing these debts compared to relatively flat income growth for female-headed households have resulted in wealth (dis)accumulation. We use the Survey of Consumer Finances (SCF) to analyze how single female-headed households, and in particular how African American single mothers were affected by the subprime boom in different, arguably more pernicious, ways. There is already considerable evidence showing that subprime lending was disproportionally sold to women, particularly minority women. Focusing on single mothers reveals important gender and racial dimensions of the lending techniques, but it also shows how marginalized families increasingly relied on housing wealth (equity) to adjust to shrinking purchasing power. Thus, contrary to the lofty expectations of the ownership society, the high mortgage debts of many low-income women suggest they own a lesser share of their homes – (dis)accumulation of wealth – than at any previous time.

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