By Stephone Coward
- The Black homeownership rate is 30% lower than the 74% white homeownership rate
- Americans who owned homes had a median net worth of $255K, more than 40X the median net worth of renters
Homeownership has traditionally been viewed as a way to ensure that your future generations have the resources to chart their paths to success. The blueprint has been: attend and graduate from college, land a good-paying job, get married, then buy a home where you can raise a family and pass it down to the next generation. However, the Black homeownership rate is 30% lower than the 74% white homeownership rate, meaning there are less homes to pass down in effort to help build up Black wealth.
Why This Matters: NPR reported, “for most American families, home equity is their largest asset.” Labor and supply shortages have limited the construction of new homes, making existing homes a premium item on the market. For homeowners looking to sell, rising home values can turn a home’s equity into money in your pocket to do things like start a business, sidestep the student loan crisis, or pass down wealth.
Historically, success is outwardly expressed in U.S. culture, thanks to multiple decades of media that has canonized the notion that everyone should try to achieve the American dream of homeownership. Unfortunately, not everybody has been able to experience this American dream. Jim Crow, segregation, racial covenants, and redlining have all played a factor in Black families’ inability to take part. Those who can buy face additional challenges with documented discrimination tactics in the appraisal market.
Situational Awareness: You should know your net worth, assets minus liabilities are what determines this figure. Assets consist of cars, investments, and homes. Examples of liabilities are debt including credit cards and student loans. The National Association for Home Builders reported that “Americans who owned homes in 2019 had a median net worth of $255,000, more than 40X the median net worth of renters“. It’s numbers like these that go into the calculations that determine the racial wealth gap.
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