The 2019 State of Hispanic Wealth Report found that Latinex people have experienced four consecutive years of homeownership growth, three straight years of income growth and the lowest poverty rate since estimates were first published by the U.S. Census Bureau in 1972. The report also broke down the key drivers behind the $150,400 wealth gap between Hispanic and non-Hispanic white households and provide context on how homeownership, entrepreneurship, savings and investments can contribute to closing the wealth divide.
At the same time Hispanics are driving homeownership growth and entrepreneurship, median household income has risen for a third consecutive year. The data also showed, however, that Latinex people are falling behind when it comes to scaling their businesses and investing in financial assets such as retirement accounts compared to all other demographic groups.
The Hispanic Wealth Project was founded in 2014 with a goal of tripling median household asset wealth among Hispanic Americans to $41,100 by 2024. As of the most recent data, Latinex people have a median household wealth of $20,600, only half that of the goal. The Federal Reserve’s Survey of Consumer Finances will publish the next set of data in the fall of 2020.
“By the year 2060, nearly one in three people in the U.S. will identify as Latino, so the future of the U.S. economy will be intrinsically tied to the economic success of the Latino population,” said Gerardo “Jerry” Ascencio, chairman of the Hispanic Wealth Project. “As baby boomers continue to age out of the American workforce, Latinos will fuel the necessary growth needed to sustain the U.S. economy.”
Several trends that could explain the wealth gap, including the relative youthfulness of the Latinex population, occupational factors and disparities in the value of assets and overall asset diversification as highlighted in the report. Despite these factors, Hispanics continue to drive positive economic trends, the Project stated.
Key findings include:
- Hispanics are driving homeownership growth in America: The Hispanic homeownership rate increased to 47.1 percent in 2018 as 362,000 Latinex people became new homeowners.
- Median household income rose for the third consecutive year: Between 2016 and 2017, Hispanics increased their real median income by 3.7 percent, the highest of any demographic.
- Latinex people are driving entrepreneurship growth but fall behind in scaling their businesses: Latinex entrepreneurs are outpacing the general population in small business formation. However, 96 percent of Latinex-owned businesses are one-person firms.
- Hispanics own retirement accounts at lower rates than all demographics but are showing signs of improvement: Hispanic retirement account ownership rates increased to 29.7 percent, while the value of retirement accounts increased by roughly 40.4 percent between 2013 and 2016.
To download a copy of the report, click here.