Hispanic Americans face difficulties when it comes to long-term wealth building due to low housing, rising interest rates, and a lack of retirement accounts, according to a new report.
The Hispanic Wealth Project, a nonprofit that hopes to help raise the household wealth of Latinos, set out in 2014 to raise the homeownership rate among Latinos to 50%, the number of Hispanic-employer firms to over 400,000, a retirement account rate of over 37%, and a total median household wealth of $45,450.
The group noted in a new report that despite their efforts, only about one-in-four Latinos have a retirement account and few have diverse assets, most often due to a "lack of investment knowledge."
Latino homeownership hit a rate of 48% earlier this year, but the group still lags behind non-Hispanic white Americans by about 26 percentage points.
"While the Latino homeownership rate has reached 48.4% and is on track to reach 50% by 2024, homeownership and real estate investing have become more lucrative, yet also less accessible," the report states. "Low housing inventory, rising interest rates, and affordability constraints pose threats to future homeownership growth. As experts in the homebuying process, it is unsurprising that real estate is the primary driver of wealth for [National Association of Hispanic Real Estate Professionals] members."
In addition, the organization found that "foreign-born members have higher rates of homeownership, investment property ownership, and entrepreneurship, but are less likely to invest in the stock market. They also tend to be more educated, but generally have lower household incomes. While incomes are lower, their net worth is higher."
The report concludes that "Latinos are tethered to America's future," due to the group being "the youngest and second-largest demographic in the U.S."
It also notes that "Latinos are set to account for the majority of the U.S. population, labor supply, and household formation growth for the foreseeable future. However, the Latino/non-Hispanic white wealth gap remains significant, posing risks to long-term U.S. economic growth."
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