Median White Wealth Dwarfs Median Minority Wealth

July 28, 2011

This article is included in these additional categories:

African-American | Financial Services | Hispanic | Household Income | Real Estate | Uncategorized

pew-research-median-net-worth-household-2005-and-2009-jul11.gifThe median wealth of white households is 20 times that of black households and 18 times that of Hispanic households, according to a Pew Research Center analysis of government data from 2009 which was released in July 2011. Median white household wealth in 2009 was $113,149, compared to median Hispanic household wealth of $6,325 and median black household wealth of $5,677.

The gap in median household wealth between white households and Hispanic and black households has roughly doubled since 2005. That year, median white household wealth was $134,992, about seven times the Hispanic median of $18,359 and 11 times the black median of $12,124.

Pew defines household wealth as the accumulated sum of assets (houses, cars, savings and checking accounts, stocks and mutual funds, retirement accounts, etc.) minus the sum of debt (mortgages, auto loans, credit card debt, etc.). It is different from household income, which measures the annual inflow of wages, interest, profits and other sources of earning.

Recession Affects Minorities More than Whites

The Pew Research Center analysis finds that, in percentage terms, the bursting of the housing market bubble in 2006 and the recession that followed from late 2007 to mid-2009 took a far greater toll on the wealth of minorities than whites.

From 2005 to 2009, inflation-adjusted median wealth fell by 66% among Hispanic households and 53% among black households, compared with just 16% among white households.

Plummeting Home Values Hit Hispanics Hardest

Pew analysis indicates plummeting house values were the principal cause of the recent erosion in household wealth among all groups, with Hispanics hit hardest by the meltdown in the housing market.

From 2005 to 2009, the median level of home equity held by Hispanic homeowners declined by half, from $99,983 to $49,145, while the homeownership rate among Hispanics was also falling, from 51% to 47%. A geographic analysis suggests the reason: A disproportionate share of Hispanics live in California, Florida, Nevada and Arizona, which have been among the states experiencing the steepest declines in housing values.

White and black homeowners also saw the median value of their home equity decline during this period, but not by as much as Hispanics. Among white homeowners, the decline was about 18%, from $115,364 in 2005 to $95,000 in 2009. Among black homeowners, it was 23%, from $76,910 in 2005 to $59,000 in 2009. There was little or no change during this period in the homeownership rate for whites and blacks; it fell from 47% to 46% among blacks and was unchanged at 74% among whites.

Zero Net Worth Rates Double among Minorities

About a third of black (35%) and Hispanic (31%) households had zero or negative net worth in 2009, compared with 15% of white households. In 2005, the comparable shares had been 29% for blacks, 23% for Hispanics and 11% for whites, keeping the same rough disparity even as rates were lower for all three ethnic groups.

Gallup: Lack of Money Concerns Americans

Basic lack of money remains Americans’ foremost financial concern, according to results of a July 2011 Gallup poll. Close to one in 5 (17%) of Americans say the most important financial problem their family faces today is a lack of money, with healthcare costs (12%) and debt (11%) following.

High cost of living/inflation (9%) ties unemployment/loss of job for a distant fourth place. Interestingly, almost as many Americans say they don’t have a foremost financial concern (16%) as say they have a lack of money.

About the Data: These findings are based on the Pew Research Center’s analysis of data from the Survey of Income and Program Participation (SIPP), an economic questionnaire distributed periodically to tens of thousands of households by the US Census Bureau.

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