Wealth in America is mostly held in either retirement savings or home equity — with roughly a third of wealth falling into each of these two categories (32.8% and 28.9%, respectively).
The average Black household in America, however, has less than one-tenth the wealth of a typical white household, and this certainly applies to home ownership and equity. A study by Clever confirmed that the racial wealth gap in the U.S. is reinforced by disparities in home prices — homes in predominantly Black zip codes are worth less than half as much as homes in predominantly white neighborhoods.
This disparity in home equity and generational wealth — of which Black families typically have less — has a ripple effect. When buying a home, with or without a real estate agent, lenders perceive borrowers to carry more risk if they have less money, so Black families are more likely to be denied mortgages (or have higher interest rates and less favorable terms if they are approved.) Over the life of the loan, a Black family will pay much more for the same home than a non-Black family.
In fact, researchers in 2015 found that Black borrowers pay 29 basis points more (or a 0.29% higher interest rate) than similar white borrowers. Black women are especially affected and pay 57.36 basis points more (or a 0.5736% higher interest rate) than white women.
Solving the racial wealth gap in the U.S. through home ownership would provide a benefit not just for Black families — it could also stimulate the economy by adding an estimated $1 trillion to $1.5 trillion by 2028. The typical Black family has approximately $12,780 in household wealth, compared to $139,300 for white families. Equalizing homeownership rates alone would decrease this racial wealth gap by more than $40,000.
White neighborhoods are valued nearly 60% more than Black neighborhoods. But, for every 10% increase in total housing market wealth, this is $147 billion in additional consumer spending. Building just 100 new low-income housing units could immediately create 80 jobs, plus an additional 72 jobs supported by ripple effects and new residents.
Innovative solutions, such as the nonprofit Dream Builders 4 Equity, can help reduce this wage gap and transform the lives of youth. Dream Builders 4 Equity’s Real Estate Program provides youth employment, training, and mentorship, while working alongside minority contractors, local youth rehab vacant homes in North City St. Louis to be sold to first-time home owners. This model could be adapted to other cities to provide similar benefits to the community.
Here are the top 25 cities with the worst housing inequality.
1. Flint, Michigan
Typical property values in predominantly Black zip codes: $32,563
Typical property values in predominantly non-Black zip codes: $242,693
Percent difference: 645%
Flint, Michigan, is probably best known for its water crisis that began in 2014. Its housing disparities, however, should also be noted. Flint tops the list of worst housing inequality with homes in predominantly non-Black zip codes valued at more than six times higher than those in predominantly Black ones.
2. Kansas City, Missouri-Kansas
Typical property values in predominantly Black zip codes: $75,707
Typical property values in predominantly non-Black zip codes: $466,458
Percent difference: 516%
The Kansas City metro is another area of concern — while the average property value in non-Black zip codes is approaching half a million dollars, those in Black zip codes don’t even top $100,000. Property values in Black neighborhoods are just a fifth of those in non-Black areas.
3. Toledo, Ohio
Typical property values in predominantly Black zip codes: $43,750
Typical property values in predominantly non-Black zip codes: $255,827
Percent difference: 485%
4. Miami-Fort Lauderdale-West Palm Beach, Florida
Typical property values in predominantly Black zip codes: $269,128
Typical property values in predominantly non-Black zip codes: $1,556,398
Percent difference: 478%
5. Bridgeport-Stamford-Norwalk, Connecticut
Typical property values in predominantly Black zip codes: $185,050
Typical property values in predominantly non-Black zip codes: $970,175
Percent difference: 424%
6. Milwaukee-Waukesha-West Allis, Wisconsin
Typical property values in predominantly Black zip codes: $97,536
Typical property values in predominantly non-Black zip codes: $470,030
Percent difference: 382%
7. Buffalo-Cheektowaga-Niagara Falls, New York
Typical property values in predominantly Black zip codes: $74,839
Typical property values in predominantly non-Black zip codes: $350,361
Percent difference: 368%
8. Philadelphia-Camden-Wilmington, Pennsylvania-New Jersey-Delaware-Maryland
Typical property values in predominantly Black zip codes: $154,024
Typical property values in predominantly non-Black zip codes: $690,475
Percent difference: 348%
9. Rochester, New York
Typical property values in predominantly Black zip codes: $60,656
Typical property values in predominantly non-Black zip codes: $255,403
Percent difference: 321%
10. Salisbury, Maryland-Delaware
Typical property values in predominantly Black zip codes: $173,458
Typical property values in predominantly non-Black zip codes: $723,613
Percent difference: 317%
11. Harrisburg-Carlisle, Pennsylvania
Typical property values in predominantly Black zip codes: $75,493
Typical property values in predominantly non-Black zip codes: $283,145
Percent difference: 275%
12. Niles-Benton Harbor, Michigan
Typical property values in predominantly Black zip codes: $145,020
Typical property values in predominantly non-Black zip codes: $526,641
Percent difference: 263%
13. Winston-Salem, North Carolina
Typical property values in predominantly Black zip codes: $102,775
Typical property values in predominantly non-Black zip codes: $366,325
Percent difference: 256%
14. Waco, Texas
Typical property values in predominantly Black zip codes: $79,050
Typical property values in predominantly non-Black zip codes: $279,968
Percent difference: 254%
15. Omaha-Council Bluffs, Nebraska-Iowa
Typical property values in predominantly Black zip codes: $86,109
Typical property values in predominantly non-Black zip codes: $296,337
Percent difference: 244%
16. Mobile, Alabama
Typical property values in predominantly Black zip codes: $117,955
Typical property values in predominantly non-Black zip codes: $405,333
Percent difference: 244%
17. Akron, Ohio
Typical property values in predominantly Black zip codes: $65,149
Typical property values in predominantly non-Black zip codes: $219,391
Percent difference: 237%
18. Charleston-North Charleston, South Carolina
Typical property values in predominantly Black zip codes: $526,190
Typical property values in predominantly non-Black zip codes: $1,726,639
Percent difference: 228%
19. Saginaw, Michigan
Typical property values in predominantly Black zip codes: $53,529
Typical property values in predominantly non-Black zip codes: $175,550
Percent difference: 228%
20. Cleveland-Elyria, Ohio
Typical property values in predominantly Black zip codes: $98,311
Typical property values in predominantly non-Black zip codes: $305,012
Percent difference: 210%
21. Tulsa, Oklahoma
Typical property values in predominantly Black zip codes: $64,136
Typical property values in predominantly non-Black zip codes: $195,799
Percent difference: 205%
22. Roanoke, Virginia
Typical property values in predominantly Black zip codes: $116,500
Typical property values in predominantly non-Black zip codes: $355,409
Percent difference: 205%
23. Baltimore-Columbia-Towson, Maryland
Typical property values in predominantly Black zip codes: $164,556
Typical property values in predominantly non-Black zip codes: $496,351
Percent difference: 202%
24. Detroit-Warren-Dearborn, Michigan
Typical property values in predominantly Black zip codes: $116,459
Typical property values in predominantly non-Black zip codes: $333,278
Percent difference: 186%
25. Jacksonville, Florida
Typical property values in predominantly Black zip codes: $154,033
Typical property values in predominantly non-Black zip codes: $439,282
Percent difference: 185%