The National Baptist Convention Housing Board is committed to addressing the needs of underserved communities. The Challenges outlined below indicate how immense and urgent the need is, but we believe that the Benefits of homeownership will allow our communities to enjoy an improved quality of life.

Housing Challenges

There is a significant difference in the average wealth of Whites vs. Blacks

• In 2002, the net worth of Black households was only $5,988. This was only 7% of $88,651, the median wealth of White households at the same time.
• Between 1999 and 2001, the net worth of Black households fell by 27%. The net worth of White households increased by 2%.
• 32 percent of Black households compared to 13 percent of White households had zero or negative net worth in 2002. These proportions are essentially unchanged since 1996.
• Fewer than 40 percent of Blacks have middle-class levels of wealth or higher, and this proportion has not changed since 1996. In contrast, nearly 75% of White households have middle-class or higher levels of wealth.
  

Homeowners have much more wealth than renters

• The median net worth of renters is only 1% of the level of net worth of homeowners.
• Home equity is a key component of household wealth and accounts for two-thirds of the mean net worth of Black households.
  

There is still a large gap in the homeownership rates of Blacks compared to Whites, which also translates into a gap in other assets

• The percentage of non-Hispanic White households who owned homes in 2004 was 76.0% compared to 49.7% for Black households.
• Financial market participation for Black households is well below the norm for White households. More than 25% of Black households, but only 6% of White households, own no assets other than a vehicle or unsecured liabilities.
• White households lead the way in owning interest-bearing assets (interest checking, savings, CD, etc.) with 69 % reporting ownership of interest-earning accounts at financial institutions in 2002. This was nearly 30 percentage points higher than the rate among Black households -- 40%.

Blacks still are rejected at a higher rate and are more apt to use sub-prime financing

• In 2002, sub-prime loans (characterized by higher interest rates) made up 26.4% of the conventional home purchase loans received by African-Americans as compared to 7.5% of the conventional purchase loans to Whites.
• Minority applicants for conventional loans are rejected significantly more often than Whites, and the disparity has grown over time, with rejection ratios in 2002 were higher than in 2001 and higher than they were in 1997.
• African-Americans were denied 2.38 times more frequently than Whites in 2002 (30% denial rate for Blacks vs. 12.5% denial rate for Whites, up from 2.31 times more frequently in 2001, and from 2.06 times more frequently in 1997).
• Denial rate differences are the same independent of income – the ratio actually gets higher as you go up the income scale. Upper-income Black applicants for conventional loans were rejected at a rate of 19.3% in 2002 compared to only 6.8% of the upper-income White applicants.
  

Sources: US Census, Pew Research Center, ACORN Study – The Great Divide (2003)