Report: Rising interest rates, low housing supply threaten Hispanic wealth
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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.
Go deeper: Lower income, lack of savings create Latino wealth gap, Latinos make $288B less than non-Hispanics annually
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