People have claimed a major difference lies in how well a person lives based on skin color. Now, statistics prove they are right. White Americans enjoy a substantially better life than black Americans when it comes to finances and wealth. What is most disconcerting is the gap has only increased over the years instead of being reduced.
The gap between the two races for wealth has almost tripled in the last 25 years. The median household wealth for white Americans is $91,405. At less than one-tenth that amount, the median household wealth for black Americans is only $6446. (5 disturbing stats on black – white inequality, August 2014)
One of the reasons for the disparity between the two races is due to homeownership. According to research, almost 73 percent of white Americans own a home while only 43.5 percent of black Americans are homeowners. Because a house is usually the largest asset a person has, it creates a great divide in overall wealth between those who have their own property and those who don’t. (5 disturbing stats on black – white inequality, August 2014)
A study from the US Census 2012 American Community Survey shows that the percentage of black Americans who are homeowners has decreased from 46 percent to 42.5 percent between 2005 and 2012. This same study shows that almost 60 percent of people who rent spend more than 30 percent of their monthly income on the rent payment. This reduces the amount they can save towards a down payment on a home of their own. (Housing in Black America)
The recent recession hit African Americans hard as it did all Americans. However, it created a trend which has not reversed even as the economy improves. Prior to the recession, we enjoyed an increase in annual income and homeownership. With foreclosures and job losses, the trend has been declining. In 2000, 56 percent of black American households reported an annual income of at least $35,000, but this number dropped to 51 percent in 2014. What’s even more disconcerting is the numbers are continuing to stay low even as the reports on the economy show improvement overall. (African American Income)
Another alarming statistic which indicates why fewer black Americans own a home is the fact that they have lower incomes – the median household income for blacks is not even 60 percent of what it is for whites.
- African Americans – $35,416 median household income
- White Americans – $59,754 median household income
Almost half of African Americans earn less than $35,000 with 22 percent earning under $15,000. Black women earn slightly less than black men, but are well behind the average earnings for all women. (5 disturbing stats on black – white inequality, August 2014)
Contributing even further to the challenge in obtaining home ownership is the rate of unemployment. The rate for whites is 5.3 percent while the unemployment rate for blacks is 11.4 percent. (5 disturbing stats on black – white inequality, August 2014)
Add up all of these factors and you can understand why the poverty rate is so much higher for black Americans than for white Americans. Only one in 10 whites live below the poverty rate while one in four blacks are living in poverty.
The poverty rate is 28.1 percent for black Americans. This is an increase from 25.5 percent in 2005. The highest rate of poverty for this group is among single mothers with children. According to statistics, almost half of them live in poverty.
Unless these issues are addressed, the American Dream of homeownership will not be achievable for many Americans. How can this be changed? Visit The Power Is Now and NAREB.com to find out more! The power is now!
Eric Lawrence Frazier, MBA
President and CEO