The African American Homeowner

The African American Homeowner

 

By Brenda Lee, Founding Director of Vision Strategy and Insights


The AA community is big (a third of the US population), spends a lot of money and is an important consumer segment. AA drives the sales of many categories; especially personal care items. Successful brands will use social media to engage them and create relationships with them as this is an important way that AA respondents connect with brands.


In the instance of home ownership, AA’s lag behind in the acquisition of homes and the value of their homes often lag behind their white peers. After all this time, this can still be attributed to racial profiling, redlining and other discriminatory practices. It would be expected that AAs would spend on home improvement if they are homeowners at the same rate as their white peers. However, the fact that they own homes less and those homes are valued less translates into them spending less per capital on home improvement.


Facts to consider:

- While African Americans make up just 14% of the population, they are responsible for $1.2 trillion in purchases annually; showing particular influence in certain categories.

- AA consumers make up over 50% of overall spending, in such categories like dry grains and vegetables. They yield strong influence in other categories like baby food (42.76%) personal soap and bath needs (41.64%) and air fresheners and deodorizers (38.29%).
- AA shoppers spent $473 million in total hair care (a $4.2 billion industry) and made other significant investments in personal appearance products, such as grooming aids ($127 million out of $889 million) and skin care preparations ($465 million out of $3 billion).

- African Americans are more likely to interact with brands on social media or to use social networks to support companies and brands.

- As it relates to AA homeownership and wealth, the picture is not as bright. The AA homeownership rate is 41 % vs white homeownership rate of 71%. This has been the gap for 50 years and is wider than in 1900.

- Homes in neighborhoods where the population is at least 50 percent black are valued at roughly half the price of homes in communities with no black people.

- Home equity is the leading source of wealth for most families of modest means. For black families, home ownership makes up most of their wealth. Given the rate of homeownership and the value of homes, the median black family had a net worth of $3,400 versus $140,000 for white families. This is a 2016 figure.

 

Contact:

Brenda Lee
Founding Director
Vision Strategy and Insights
818-261-8340
brenda@visionstrategyandinsights.com