Report: Rising interest rates, low housing supply threaten Hispanic wealth
A lack of retirement accounts, rising interest rates and a low housing supply pose risks to the building of long-term Latino wealth in the U.S., a new report warns.
Why it matters: Even as Latinos have made financial and educational gains over the past few decades, they lag behind their non-Hispanic white counterparts in critical indicators of financial wellbeing.
The big picture: The Hispanic Wealth Project, a nonprofit that aims to empower Latinos financially, set a goal in 2014 to triple Latino household wealth by 2024, but new economic realities could prevent it from reaching its objectives, according to a report the group released last week.
- The group aimed for 37% of Latinos to have retirement accounts and for 50% to own a home by 2024. It also hoped for Latinos' median net worth to hit $45,450 by then.
- The latest report is largely based on online surveys of members of the National Association of Hispanic Real Estate Professionals.
Yes, but: As of now, only 25.5% of Latinos invest in retirement accounts, and their lack of diverse assets has worsened in recent years, the report found. A "lack of investment knowledge" is the top reason why, according to the report.
- The Latino homeownership rate reached 48% in the first half of 2022 but is 26 percentage points lower than that of non-Hispanic white Americans, according to U.S. Census data cited in the report.
- Latinos are still on track to reach a 50% ownership rate by 2024, but rising interest rates and a lack of affordable housing options for first-time home buyers pose a serious threat.
Between the lines: The report stood in contrast to a much rosier study also released last week that showed the total economic output of U.S. Latinos reached $2.8 trillion in 2020, surpassing the GDPs of the U.K. and India.
- That study failed to illustrate the economic inequality within Latino communities based on region, country of origin and class, according to an Axios analysis.
Of note: The 2022 State of Hispanic Wealth Report Survey was conducted online between July 12 and July 25, 2022. A majority of respondents are members of the National Association of Hispanic Real Estate Professionals.
- The survey was administered online and received 1,221 responses across 36 states and territories, including the District of Columbia and Puerto Rico.
Subscribe to Axios Latino to get vital news about Latinos and Latin America, delivered to your inbox on Tuesdays and Thursdays.