2024 Economic State of Hispanic Americans and its Long-Term Effects on Latino Wealth

Are Hispanics in America doing better? I guess it’s that time of the year when we unpack the Hispanic financial statistics.

Over the last 33 years, median Hispanic American wealth has had substantial social and economic growth ($10,000 in 1989 to $62,000 in 2022). Post-pandemic saw an increase of +93% in equities and +44% in real estate held by Hispanics in the US. By 2022, Hispanic household wealth rose to $63,400. This +500% increase in 35 years is astounding, considering this data point is perennially depressed by waves of new migrants.

Although other racial demographics have seen increases in overall wealth over the same period, Hispanic household wealth is poised to become the second wealthiest group by 2050.

Rapid home price appreciation in recent years has created a pathway to wealth, first-time buyers will have a tougher time in 2025 and beyond. Hispanic families who own their homes have, on average, 26.4x the net worth of those who rent. Financial asset diversification plays a large role in ensuring financial stability. Furthermore, understanding financial literacy will be a critical ally in competition against rising costs.

It’s all not good news. According to the Federal Reserve wealth components data, “other liabilities” for Hispanics increased by nearly 50%. All of which lean toward (asset) progress with (liability) caution.

The Latinization of America

According to the US Census Bureau, Americans will be older and more diverse by 2100.

While that may be too far to conceive, the Hispanic population is projected to reach 111 million by 2060 (an increase of 70% in four decades). The world is changing; you may as well double down on Spanish and Chinese as a foreign language. In his book “Latino Century: How America’s Largest Minority is Transforming Democracy,” Mike Madrid, Senior Political Adviser at the New California Coalition notes that:

“Latinos exist as a multiethnic, aspirational, working-class community. And whichever party can pull all of that together is likely to be the dominant party for the next generation. The Latinization of America is the Latinization of the blue-collar, non-college-educated workforce.”

This November (2024), 36.2 million Latinos will be eligible to vote, a 153 percent increase from 2000. Latinos have generally backed the Democrats however this alignment varies by ethnicity. Pew Research Center found that, for example, a majority of Cuban and Mexican Americans identify as Republicans.

The Congressional Hispanic Caucus (CHC) is well aware of this conservative complexity. Today, with 42 Hispanic Congressional members representing nearly 70 million Hispanics living in America, the CHC balances these ideas on the premise that Hispanics are more concerned with economic mobility versus wedge issues. This election cycle focuses on Civil Rights, Diversity and Inclusion initiatives, Workforce Development, Healthcare, Technology, and Infrastructure.

Pre- and Post-Election Wealth

Representing 19 percent of the U.S. population, Hispanic families hold just three percent of the nation’s total wealth. The median net worth of white families ($285,000) is more than four times greater than that of Hispanic families ($61,600). Mind you, Asian families lead by nearly nine times.

“Across traditional metrics of wealth—like retirement savings, student debt, and homeownership—Hispanic Americans continue to face barriers to economic security.”

Assisted by 2 trillion in real estate value, only one in four has a retirement account. Post-pandemic, Hispanic families have increased their Equity positions by 93% from $140 billion to $270 billion.

High school completion among Hispanics is increasing. In 2022, nearly 88% of those aged 25-29 held a high school diploma (an increase of 17% since 2012). Four-year degree holders are up to 44%. However, Hispanic families are overburdened by student debt.

Despite being among those most affected by the health and economic effects of COVID-19, Hispanic workers served as the backbone for the nation’s economic growth. According to the latest U.S. Latino GDP report, the total economic output, or gross domestic product (GDP), of Latinos in the U.S. reached $3.7 trillion in 2022.

This exceeded the $3.2 trillion mark set in 2021. The figure makes the U.S. Latino GDP the fifth largest GDP in the world for 2022 — greater than India, the United Kingdom, and France.

On the Other Side of the Economic Track

While there are visible signs of improvement masked by deep inequities that push down Hispanic wealth, there is room for improvement. Based on leading indicators of social and economic well-being showing that, on average, Hispanic Americans are struggling:

Unemployment

• The unemployment rate for Hispanic workers jumped to 16.7% during the pandemic, largely due to their overrepresentation in low-wage and frontline industries.
• However, the national unemployment rate for Hispanic workers dipped to 5% by the second quarter of 2024. 
  • Specifically, the share of unemployed Hispanic women has dropped from 20.2% in April 2020 to 4.3%.
  • Washington state, New York, and Pennsylvania all had Hispanic unemployment rates above 6.0%, at 7.4%, 6.4%, and 6.4% respectively.
  • Florida and Virginia had the lowest Hispanic unemployment rates among those states with sufficient sample sizes for precise estimates, both at 3.3%.

The Struggle for an Affordable Home

• According to the National Association of Hispanic Real Estate Professionals (NAHREP), in 2023, the Hispanic homeownership rate reached 49.5 percent, a key milestone. Despite facing the least affordable housing market on record, Latinos added 377,000 new owner-households. The largest single-year gain since 2005.
  • Over 9.5 million Hispanic households own their own home.
• Although federal interest rates had a much-needed cooling effect on home price appreciation in 2023, prices are still up nearly 20% since 2019.
• Hispanic homebuyers have set their sights on more affordable locations. Many are opting to relocate from higher-cost markets into other areas (e.g., from California and Florida to Colorado and Texas, from the Washington, D.C. metro area to the Carolinas, and from New York City to New Jersey).
• Despite market challenges, Hispanic sentiments around homeownership remain very positive.

The Hispanic Education and Debt Crisis

• The wealth gap between Hispanic and White households increases with education due to student loan debt. Although High school graduation rates for most Americans converge, the quality of post-K-12 educational attainment struggles to keep pace.
• While the $1.7 trillion student loan continues to spiral, Latino borrowers face extra difficulties stemming from economic inequities.
• 72 percent of Latino students take out student loans, compared to 66 percent of white borrowers.
• Students of color are more likely to take on student debt and disproportionately struggle to pay it back at higher rates than their white counterparts, perpetuating a “vicious cycle” of economic inequality along racial lines, according to research released by the Student Borrower Protection Center.

Is Hispanic Median Wealth On Track But HODL

• The median wealth of Asian Households in the US is up to $536,000 – nearly 8 times the wealth of the median Black family ($61,600).
  • White families came in at a modest $285,000.
  • In fact, according to the Fed. Reserves Survey of Consumer Finances (2022), the median U.S. household was nearly $51,000 wealthier in 2022 than in 2019. A 37% increase.
• “Much of the divergence in net worth by race and ethnicity since 2019 can be attributed to divergence in the real values of financial asset holdings,” wrote the report’s authors.
• Hispanic households have more wealth concentrated in real estate (46.4%) than in stocks, mutual funds, and exchange-traded funds (ETFs) (5.2%). When the market is roaring north of inflation (YTD September 2024), Hispanic households are falling behind.
  • It’s important to note that homes typically come with a mortgage. Hispanic US mortgages represent nearly 72% of the debt that Hispanic families are carrying.
• Hispanics are less likely to have workplace retirement plans and individual retirement accounts (IRAs). For example, 38% of Hispanics have a workplace retirement plan, compared to 51% of the general population.
• Older Hispanics typically earn less with increasing healthcare costs.  Households with a householder of Hispanic origin were also more likely to hold medical debt (21.7%) than households without (18.6%). In combination, these issues aren’t good.

Synopsis of these Hispanic American Statistics for 2024

I take statistics with a grain of salt. When the stats are favorable, most people cheer and have no pushback. In contrast, when the data is unfavorable, most lash out and ask for sources and methodology. One thing that I know for sure, no matter how much data is sourced and where it comes from, most people don’t read the reports. If they did, they would be alarmed and would likely start making changes in their daily routine.

Simple as that.

The answers are in the report themselves. Wealth parity is only attainable through time and sacrifice. A combination of Education, High earning/In-Demand Career pathways, Cash Flow management, Financial planning, Marriage, and Ownership; should help you and your family close your wealth gap. Even if you don’t reach full parity in the outcome, you will set up the next generation to radically pivot.

While the future may be uncertain, it helps to draft a positive chapter in your book every day. If you need a financial plan for your age group, check out the Net Max Financial Plans. The information is FREE but the effort is up to you. Two people you should follow, are Yanely Espinal (Miss Be Helpful and author of Mind Your Money) and Jannese Torres (Yo Quiero Dinero). Solutions exist if you want to use them.

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