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Median Net Worth Essay

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I see your observation about the median net worth gap of Non-Hispanic White households and Black households; however, it is not true that this difference must be caused by differing cultures or values. A person’s net worth, or value of all of their assets minus their debts, is mostly made up by the value of their home (46:36). The cause of these differences can be traced back to the 1930s to the 1940s. These differences in median net worth are due mainly to the unfair opportunities Whites got over Blacks when it came to the housing market. During the 1930’s the Federal Housing Authority partnered with banks and backed loans on houses in order to encourage more people to buy houses (27:11). The FHA was able to bring the down-payment needed to tavke out a mortgage from 50% to 10-20%, and the amount of time needed to pay it from 5 years to 30 years (27:54). There were particular people that were allowed this opportunity and those were White people. Neighborhoods with primarily minorities were said to be volatile to invest in and therefore were “red-lined” by organizations such as The National Appraisal System (33:12). …show more content…

This forced Blacks to rent homes which did not build equity or buy homes in low valued neighborhoods. Equity is the value of a house minus the amount owed to the bank for a loan. If property values goes up, a person owns more of their house than they did before. Equity is what allowed people to refinance their houses and get money in return . Equity was only available to Whites as only they could build equity in their houses and have this wealth which they could eventually pass on to their

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