Homeownership, business ownership, and financial investments are the most salient wealth-creation factors for Hispanic Americans
MIAMI, Sept. 28, 2023 /PRNewswire-PRWeb/ -- The National Association of Hispanic Real Estate Professionals (NAHREP®) and the Hispanic Wealth Project™ (HWP) unveiled Part 1 of the annual State of Hispanic Wealth Report (SHWR) today at the L'ATTITUDE conference. The report, titled "Drivers of Wealth," provides a comprehensive assessment of the progress achieved and challenges remaining in narrowing the wealth divide between Hispanic and non-Hispanic white households. The full report, scheduled for release on November 9 at the HWP Hispanic Wealth Symposium in Washington D.C., will analyze updated household wealth data from the Federal Reserve.
Remarkable strides have been made since 2013 when the median net worth of Latino families stood at $15,200. By 2019, this figure had more than doubled, soaring to $36,100. However, while the wealth gap is narrowing, it remains significant, with non-Hispanic white households boasting a median net worth of $189,100, five times greater than their Hispanic counterparts.
The report discusses how age is highly consequential to wealth; As individuals age, earnings rise and assets have more time to appreciate. Collectively, Latinos are significantly younger than the general population. Education is also highly correlated with income; In 2019, Latinos with a college degree had a median income 79.5 percent greater than those without. Education also provides exposure to wealth-building principles.
Latinos who own a home have a median net worth that is, on average, 27.4 times that of renters. The connection between homeownership and wealth is especially consequential for Latinos, who hold 54.1 percent of their total wealth in real estate. The Urban Institute estimates that 70% of homeownership growth in America over the next 20 years will come from Hispanic homebuyers.
"Latinos are just beginning to age into their prime earning and investing years, and as they continue to age and become more educated, their economic impact will undoubtedly grow," said Sara Rodriguez, Hispanic Wealth Project Chairperson. She added, "Supporting the growth of Hispanic wealth will ensure both the financial stability of Hispanic individuals and families and the greater prosperity of the U.S. economy."
Latinos are starting businesses at almost twice the rate of their non-Hispanic white counterparts, and Latino-owned employer firms are growing their revenue and number of employees more quickly. There are now more than 375,000 Latino-owned employer businesses in the U.S. Self-employed Hispanic households have, on average, 5 times the median net worth of households that are employed by others.
Diversification of assets is critical to wealth building and, in addition to non-financial assets like home and business equity, financial assets are also highly correlated with net worth. Latino families who own non-cash financial assets, such as stocks, bonds, and retirement accounts, have a median net worth that is, on average, 10.6 times that of families who do not. The potential for growth in this area is substantial, because currently only 41.5 percent of Hispanic households invest in any form of non-cash financial asset, and only 25.5 percent own a retirement account.
"Implementing recommendations centered on the three wealth-building pillars—homeownership, business ownership, and financial assets—will expedite wealth accumulation within the Latino community," said Gary Acosta Co-Founder & CEO of NAHREP.
Part two of this report, scheduled for release in late fall 2023, will analyze updated household wealth data from the Federal Reserve, assess progress toward HWP goals, and explore the repercussions of the COVID-19 pandemic on Latino net worth.
NAHREP and The Hispanic Wealth Project remain steadfast in their commitment to empowering the Hispanic community through financial education and opportunities for wealth creation.
About NAHREP:
The National Association of Hispanic Real Estate Professionals® (NAHREP®), a nonprofit 501(c)6 trade association, is dedicated to advancing sustainable homeownership for the Hispanic community in America. NAHREP has a network of over 40,000 real estate professionals and 100 local chapters nationwide, hosting several national events per year and publishing multiple industry cornerstone reports annually and multimedia content. Join us in advocating for policies that grow sustainable Latino homeownership, read our 2023 policy priorities here.
About the Hispanic Wealth Project:
The Hispanic Wealth Project (HWP), a nonprofit 501(c)3 organization, is committed to empowering Latinos to fully participate and prosper in the U.S. economy through education, small business development and sustainable homeownership.
Media Contact
Orlando Camargo, NAHREP, 6197194800, [email protected], https://nahrep.org
SOURCE NAHREP
Share this article