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Similar a From Recession to Recovery: The Status and Outlook for Economic Growth in the African-American Community
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From Recession to Recovery: The Status and Outlook for Economic Growth in the African-American Community
- 1. From Recession to Recovery: The Status and Outlook for Economic Growth in the African-American Community
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- 4. Homeownership Rates have decreased for all demographics groups since their peak… 1994Q1 Peak 2011Q2 90.0 80.0 76.2 73.7 69.8 70.0 60.0 49.7 50.1 50.0 44.2 46.6 42.1 40.3 40.0 30.0 20.0 10.0 0.0 African-American Hispanic White Source: Census Bureau 4
- 5. …but African-American Homeownership Rates fell sharply during the economic boom period.. 52.0 50.0 48.0 46.0 44.0 42.0 40.0 Source: Census Bureau 5
- 6. …much before House Price Appreciation began to fall… S&P Case Shiller National Price Index AA Homeownership Rate 20.0% 51.00 Correlation Coefficient: 0.34 15.0% 50.00 10.0% 49.00 5.0% 48.00 0.0% 47.00 -5.0% 46.00 -10.0% 45.00 -15.0% 44.00 -20.0% 43.00 -25.0% 42.00 2004Q1 2009Q3 1998Q1 1998Q3 1999Q1 1999Q3 2000Q1 2000Q3 2001Q1 2001Q3 2002Q1 2002Q3 2003Q1 2003Q3 2004Q3 2005Q1 2005Q3 2006Q1 2006Q3 2007Q1 2007Q3 2008Q1 2008Q3 2009Q1 2010Q1 2010Q3 Source: S&P Case Shiller, Mortgage Bankers Association 6
- 7. …and much before Subprime Foreclosure Rates began to rise… Foreclosure Rate - Subprime Loans AA Homeownership Rate 5.00 51.00 Correlation Coefficient: -0.28 4.50 50.00 4.00 49.00 3.50 48.00 3.00 47.00 2.50 46.00 2.00 45.00 1.50 44.00 1.00 0.50 43.00 0.00 42.00 Source: Mortgage Bankers Association 7
- 8. …and before Unemployment Rates for African- Americans began to rise. AA Unemployment Rate AA Homeownership Rate 18.00 51.00 Correlation Coefficient: -0.31 16.00 50.00 14.00 49.00 12.00 48.00 10.00 47.00 8.00 46.00 6.00 45.00 4.00 44.00 2.00 43.00 0.00 42.00 Source: S&P Case Shiller, Mortgage Bankers Association 8
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- 10. Unemployment Rates of African-Americans remain twice as high as that of white Americans… African-American Hispanic White, non-Hispanic 18.00 16.00 14.00 12.00 10.00 Rate 8.00 6.00 4.00 2.00 0.00 Nov-00 Dec-02 Nov-05 Dec-07 Nov-10 Apr-01 Sep-01 Oct-03 Mar-04 Apr-06 Sep-06 May-08 Oct-08 Mar-09 Apr-11 Jan-00 Feb-02 May-03 Jan-05 Feb-07 Jan-10 Aug-04 Aug-09 Jul-02 Jun-00 Jun-05 Jul-07 Jun-10 Source: : Bureau of Labor Statistics 10
- 11. …with Employment Growth of African-Americans suffering greatly during the Great Recession. 10.0% 8.0% 6.0% 4.6% 3.7% 4.0% 2.0% 0.0% White -2.0% -1.2% Black -4.0% Hispanic -6.0% -5.7% -8.0% Source: : Bureau of Labor Statistics, Current Population Survey 11
- 12. A major cause of the decline has been the loss of jobs in the manufacturing and construction sectors… 15.0% 10.0% 5.0% 0.0% Total Nonfarm -5.0% Government -10.0% Construction Manufacturing -15.0% -20.0% -25.0% Dec-03 to Dec- Dec-05 to Dec- Dec-07 to Jun-09 to Jun- 05 07 Jun-09 11 Pre-Bubble Housing Bubble Recession Recovery Source: : Bureau of Labor Statistics, Current Population Survey 12
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- 14. Median Household Income fell significantly for all groups during the Great Recession… 10.0% 8.0% 12-Month %’age Change 6.0% 4.0% 2.0% African-American 0.0% Hispanic White -2.0% -4.0% -6.0% Source: : Census Bureau 14
- 15. …however, Median Net Worth declined was largest for persons of color… 2005 2009 $180,000 $168,103 $160,000 $140,000 $134,992 $120,000 $113,149 $100,000 $78,066 $80,000 $60,000 $40,000 $18,359 $12,124 $20,000 $6,325 $5,677 $- Whites Hispanics African-Americans Asians Source: : PEW Research Center 15
- 16. …with the collapse of the housing market being the primary cause of the decline. Median Net Worth of Households with and Without Home Equity, 2005 and 2009 Total Excluding Home Equity 2005 2009 Change 2005 2009 Change All $96,894 $70,000 -$26,894 $17,088 $13,566 -$3,522 Whites $134,992 $113,149 -$21,843 $32,961 $29,169 -$3,792 Hispanics $18,359 $6,325 -$12,034 $3,285 $2,806 -$479 African- $12,124 $5,677 -$6,447 $1,676 $1,050 -$626 Americans Asians $168,103 $78,066 -$90,037 $27,137 $20,300 -$6,837 Source: : PEW Research Center 16
- 17. African-Americans and Hispanics are much more dependent on the housing market for wealth creation. Whites Hispanics African-Americans Asians 2005 2009 2005 2009 2005 2009 2005 2009 Own 44% 38% 65% 55% 59% 56% 50% 35% Home Stocks and 8% 16% 3% 3% 2% 5% 6% 32% Mutual Funds IRA and KEOUGH 9% 10% 3% 6% 5% 6% 6% 6% accounts 401(k) and thrift 11% 12% 8% 11% 12% 14% 10% 10% accounts Unsecured -3% -5% -5% -13% -7% -12% -3% -4% Liabilities Source: : PEW Research Center 17
- 18. However, despite the downturn, wealth concentration grew within all groups. Share of Wealth Held by the Wealthiest 10% of Households, 2005 and 2009 2005 2009 80% 72% Percent of Group Wealth Share 70% 67% 59% 61% 60% 56% 51% 50% 46% 44% 40% 30% 20% 10% 0% Whites Hispanics African-Americans Asians Source: : PEW Research Center 18
- 19. So where do we go from here? Wealth creation in the AA community is critically dependent upon improvement in the labor market National unemployment rates are projected to remain high through at least the end of 2012, thwarting significant improvement in the housing market Significant recovery in the AA housing market will require non-traditional approaches to address issues of economic blight, foreclosure, and credit 19
- 20. Thank You. 20