As it turns out, last year’s encouraging trend among Hispanic homeowners belies a widening gap in wealth between Hispanics and whites, according to a new report by Hispanic Wealth Project (HWP) that looks at the past few years.
While in 2015, Hispanics drove homeownership growth for the U.S.‒‒accounting for 69 percent of the total net growth in U.S. homeownership‒‒ the fact remains that homeownership is still only about 45 percent for Hispanics in the U.S.. In fact, the median Hispanic household is still a renter household, according to the report.
Moreover, Hispanics accounted for 66 percent of U.S. labor force growth and 73 percent of the increase in U.S. workers employed between 2000 and 2015. And yet, the report states, the gap between Hispanic and whites is growing, with white wealth overall calculated at 10 times that of Hispanic wealth. This gulf has gotten worse since the recession, which hit Hispanic households harder than white households.
“The Hispanic Wealth Project was formed as a response to the vanishing wealth Latinos experienced during the great recession, when they lost two-thirds of their household wealth,” said HWP chairman Jerry Ascencio.
According to HWP, the median white household in 2011 had $111,146 in household wealth while the median Hispanic household had only $8,348. Two years later, both groups gained, but not proportionally. Median white household wealth in 2013 was $141,900, up nearly $31,000, while Hispanic household wealth at $13,700, a gain of barely $5,000.
“Without active intervention,” the report states, “this trend will likely continue unfettered.”
Several financial institutions did try some active intervention in 2015, HWP found. Last year, several firms aiming to bring Hispanic homeownership up to at least 50 percent got together to encourage more mortgage originations for Hispanics. Most notably, Wells Fargo committed to help fund $125 billion in mortgage originations and $10 million in housing counseling services, while increasing its workforce of Hispanic loan consultants. Bank of America, Clearpoint Financial Services, Freddie Mac, the Mortgage Bankers Association, and Realogy also stepped up their efforts to help, the report stated.
“We are encouraged by the commitments from several organizations that recognize how vital Latinos are to the U.S. economy and look forward to engaging additional partners in this important effort,” Ascencio said.