The wealth gap between whites and minorities has always existed, but recent research shows it’s hit an all time high and housing has been a big contributor. According to the Pew Research Center, the housing downturn has hit African Americans and Hispanics harder than whites.
The housing crisis, in conjunction with the 2007 – 2009 recession, has taken much more of a toll on minorities due to the fact that a large share of their net worth came from their home equity. On top of that, a greater percentage of Hispanics live in some of the states hit hardest by the housing crisis. Those states include Nevada, California, Florida and Arizona. In Nevada, Hispanics make up 26 percent of the population and African Americans make up 8 percent.
From 2005 – 2009, U.S. Census data shows the median net worth of Hispanic households plummeted 66 percent and net worth among African Americans dropped 53 percent. At the same time, white households only dropped 16 percent. The report found white households were not hit as hard because their wealth was more diversified outside of real estate.
In hopes of preventing buyers from depleting all their assets in order to come up a down-payment for a home, the National Association of Realtors is fighting regulators from setting guidelines that would require high down-payments.
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