Minorities will
be the driving
force behind
new household
formation over the
coming decades.
Minorities will be the driving force behind
new household formation over the coming
decades. According to the Urban Institute,
from 2010 to 2020, 8.9 million net new
minority households will form, accounting for
77 percent of projected household growth
during this period. From 2020 to 2030, an
additional 9.1 million net new minority households will form, accounting for a staggering
88 percent of projected household growth
in this decade.45 In short, the future vitality of the housing market will depend upon
meeting the housing needs of these new
minority households (See Chart F).
Unfortunately, the median incomes of
African-American and Hispanic families
continue to lag significantly behind those
of their white counterparts. Remarkably,
in 2012, the median income of a minority household aged 25 to 34 was $20,000
below that of a white household of the same
age. In addition, minority household wealth
is extremely low. According to a recent analysis by the Pew Research Center, in 2013,
the median net worth of an African-American household was just $11,000, nearly 13
times less than the $141,900 median net
worth of white households. In 2013, the
median net worth of Hispanic households
was also very low – just $13,700, about ten
times less than that of whites (See Chart
G).46 While the Great Recession negatively
impacted the net wealth of all racial groups,
the subsequent decline in wealth has been
most pronounced among African-American
and Hispanic families, many of whom lost a
major asset – their home – following the collapse of the homeownership market.
Consistent with these findings, the median
net wealth of minority renters is particularly
low. Harvard’s Joint Center for Housing
Studies calculated that, in 2010, the median
net worth of African-American renters was
just $2,100, and was $4,500 for Hispanic
C har t F
Housing Demand will Increase, Largely Driven by Minorities
Net New Households (Millions)
Proje