WATCH: New Report Sheds Light On Wealth Gap In America

According to a new study, as reported by CNBC, homeownership among blacks rose during that time as buyers took advantage of the lower interest rates, causing a 72% rise in black-owned real estate values.

Using data secured from the Federal Reserve Board, Wells Fargo reported that black households saw their net worth rise to more than $340,000 from the end of 2019 to the third quarter of 2022.

This 32% increase is good news for black families, as non-black families saw just a 21% increase during the same period. However, black households still find their net worth is 70% below their non-black counterparts.

February 26, 2023

According to CNBC, chief economist at Wells Fargo, Jay Bryson, said, “There’s been progress directionally, but there’s still a huge gap. This is a step in the right direction, but there’s still a lot of progress to be made here.”

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A contributing factor to the gap may be that the assets of black households are not as diversified as the six major non-black classes combined. Assets can be spread over real estate, private business, consumer durable goods, corporate equity, mutual funds, pension entitlements, and other assets. At the end of 2019, approximately 70% of black households’ allocations focused on pension entitlements and real estate.

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Bryson noted that the good news was that black families were not hit with the enormous fluctuations in the stock market due to their lack of diversification. However, he said, “The bad thing is they aren’t as diversified as what they probably should be, but it certainly did help, at least in terms of last year…It is a blessing in disguise.”

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Marketwatch reported that homeownership among blacks is up to 44%, with the highest in southeastern cities.

According to Apartment List, “Starting with baby boomers, every generation of black Americans has attained homeownership at a slower pace than the generation that preceded them.” 17% of 30-year-old Black millennials own their own homes, which is 10% less when compared to previous generations.

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Bryson said if we see a recession in 2023, that could reverse some of the progress made. He said, “Historically, the gap between the Black and non-Black unemployment rates tends to rise as the economy enters recession.”

“What we want to see,” said National Community Reinvestment Coalition’s Dedrick Asante-Muhammad, “is substantial homeownership increases, long-term home value increases, income and maybe in 401(k)s and stocks.”