Growth in African American Household Wealth
Center on Wealth and Philanthropy
By John Havens
Until 10 years ago, household wealth as measured by net worth has grown substantially slower (roughly 30% slower) for African Americans in the U.S. than the national rate. From 1992 through 2001 it grew at a real annual rate of just 2.4% as compared with the national long term rate of 3.2%.
Based on the most recent data from the Federal Reserve, the Center on Wealth and Philanthropy estimates that the average wealth of households headed by an African American grew at an annual real (adjusted for inflation) rate of 4.2% from 1992 through 2007. This is above the long-term national rate of 3.2% and nearly double the 2.4% rate cited above.
Nevertheless, the average wealth of African American households was only about a quarter of the average wealth for all households in 2007. Additionally, since 2007, the decline in both the financial and especially the housing markets occurring during the recession affected the wealth of African American households more than for the average household. This is because African American households have a higher debt (i.e., mortgages, student loans, consumer credit, etc.) -to-asset ratio.