Rising interest rates and housing supply could threaten Hispanic wealth

Lack of retirement accounts, rising interest rates and low housing supply pose risks to building long-term Latin American wealth, a new report warns.

why is it important: Even though Latinos have made financial and educative gains in recent decades, they lag behind their non-Hispanic white counterparts in critical indicators of financial well-being.

The big picture: The Hispanic Wealth Projecta nonprofit that aims to financially empower Latinos, set a goal in 2014 to triple the wealth of Latino households by 2024, but new economic realities could prevent it from achieving its goals, according to a report released by the group last week.

  • The group aimed for 37% of Latinos to have retirement accounts and 50% to own homes by 2024. It also hoped that the median net worth of Latinos would reach $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: Currently, only 25.5% of Latinos invest in retirement accounts, and their lack of diversified assets has worsened in recent years, according to the report. A “lack of investment knowledge” is the main reason, according to the report.

  • The homeownership rate for Latinos hit 48% in the first half of 2022 but is 26 percentage points lower than that of non-Hispanic white Americans, according to US census data quoted in the report.
  • Latinos are still on track to hit 50% homeownership by 2024, but rising interest rates and a lack of affordable housing options for first-time home buyers pose a threat serious.

Between the lines: The report contrasted with a much more optimistic study also released last week that showed the total economic output of American Latinos reached $2.8 trillion in 2020, surpassing the GDPs of the United Kingdom and India.

  • This study failed to illustrate economic inequality within Latin American communities based on region, country of origin and class, according to an Axios analysis.

To note : The 2022 State of Hispanic Wealth Report survey was conducted online between July 12 and July 25, 2022. The majority of respondents are members of the National Association of Hispanic Real Estate Professionals.

  • The survey was administered online and received 1,221 responses from 36 states and territories, including the District of Columbia and Puerto Rico.

Go further: Lower income and lack of savings create wealth gap among Latinos, Latinos earn $288 billion less than non-Hispanics each year

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