Home equity decreased across all racial groups in 2009: whites’ average home equity fell to $95,000; in 2005, a white’s home equity was $115,364 on average; blacks’ home equity fell to $59,000 in 2009, creating an equity loss of $17,910 over the four year period; and Hispanics suffered the largest loss in home equity however, dropping from $100,000 in 2005 to $49,145 in 2009, according to Housing Wire.
The Washington Post adds that the current wealth gap is approximately double the amount of the gap that existed pre-recession. One of the reasons the recession was so detrimental for minorities in particular is because the minorities’ net worth is more dependent on housing equity than whites.
“Before the recession, housing equity accounted for about two-thirds of the net worth of Hispanics and about 59 percent of that of black families. By contrast, 44 percent of white families’ wealth consisted of housing equity,” said the Washington Post.
However, the wealthy are recovering unharmed, with the Census Bureau statistics demonstrating that wealth owned by the wealthiest 10 percent of households actually went up 7 percent overall from 2005 to 2009, despite their ethnic group. Unlike the rest of Hispanics, the well-off Hispanics experienced a 16 percent hike and the wealthiest blacks had a 8 percent increase.
Housing Wire said that whites had a median wealth of $113,149 in 2009, reportedly making significantly more than Hispanics who made $6,325 (nearly 18 times less) according to Pew Research Center. Blacks were also found to have made $5,677 (almost 20 times less than whites) in 2009. Asian Americans households experienced a drastic 54 percent reduction over the four year period, to a final wealth of $78,066 in 2009.
The wealth was calculated as the “amount of assets minus the sum of debt owed.”
“From 2005 to 2009, median wealth dropped 66 percent among Hispanics and 53 percent among blacks, compared to 16 percent from whites, according to the data,” said Housing Wire. “It is the largest wealth gap between minorities and whites since the government began tracking the data more than a quarter-century ago.”