Understanding the Necessity of Ownership in real life
Black home ownership in the US is declining. Homeownership amongst different races varies. While others are buying, Blacks are stuck renting. The TFG crew discusses the recent data from a realtor article breakdown of the decline of homeownership and the social media rise of high-cost renting.
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Ownership and Wealth
Black homeownership rates have declined to levels not seen since the 1960s when private race-based discrimination was legal and often sectioned by the government.
According to a report by the Urban Institute, since 2001, the black homeownership rate has seen the most dramatic drop of any racial or ethnic group, declining 5 percent, compared with a 1 percent decline for white families and increases for Hispanic and “other” families (primarily Asian Americans and Pacific Islanders).
While ownership seems isolated, it’s not.
The 2023 Snapshot of Race and Home Buying in America examines homeownership trends and challenges by race and location to explain the current racial disparities in the housing market. Black homeowners spend more of their income to own their homes than all racial groups, with 30% being cost-burdened – defined as spending more than 30% of their income on housing. That’s followed by Hispanic Americans (28%), Asian Americans (26%), and White Americans (21%).
More than half of Black renter households (54%) spend more than 30% of their income on rent, the most of any racial group. About 30% of Black renters are severely cost-burdened – defined as spending more than 50% of their income on rent – representing nearly 2.5 million households.
The Generational Wealth Damage
In 2019, the typical net worth of Black families was $24,000, compared to $188,200 for White families. The median wealth of Black households was $24,100, compared to $189,100 for White households. Black homeownership can help build generational wealth. However, Black families face higher barriers to homeownership, which disadvantages them.
Per the Brookings Institute, homes in predominantly Black neighborhoods are valued at $48,000 less than homes in predominantly White neighborhoods. This contributes to the racial wealth gap. In combination with the income gap, a lack of ownership (today) leads to high long-term renting costs and even higher costs of ownership (tomorrow).
Renting is not the solution that you think it is. You are merely committing to paying someone’s else mortgage and building someone else’s wealth.
Why do we talk about this?
The Financial Griot is a play on two words (Finance + Griot) that hold significance in closing the wealth gap while embracing our differences. We avoid the cliche advice on 15-second reels in favor of truth and understanding. Specifically, we want you to become Financially literate, incorporate actionable steps, and ultimately build generational wealth.
You really can’t do that as a renter. There is a real value proposition in ownership.
Can you imagine being a Millionaire in 20 years or less? Yeah, it’s possible. 80% of millionaires are the first generation. That means they didn’t come from wealth. We teach you how. Join a community of subscribers that welcome a fresh take on money.
Connect with the TFG Crew
- Alainta Alcin - Blogger, Travel and Money Enthusiast @alainta_alcin
- Lovely Merdelus - Entrepreneur and Small Business Growth Specialist @lovelymerdelus
- Lawrence Delva-Gonzalez - Financial Blogger and Travel Foodie @GQ_accountant
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