The total net worth of Hispanic households might reach $4.4 trillion by 2025, according to a new report from the Federal Reserve Bank of St. Louis. But the report predicts that much of that growth will be driven by the growing number of Hispanic households — not by the growing wealth of the average family.
Hispanic men and women made up about 16 percent of the U.S. population in 2010, and held $1.4 trillion dollars of overall wealth. That's just 2.2 percent of the nation's income, property, and financial assets, according to the report. By 2050, the Hispanic population will almost double, but the share of wealth Hispanics hold will likely remain disproportionately small.
The recession widened the wealth gap between white and Hispanic families. Hispanic families lost almost one-third of their net worth between 2007 and 2010. While white families were also hard hit, the average white family lost a smaller share of its total wealth than the average minority family, partly because white families tended to hold more types of assets and to have less money tied up in home equity.
The report's authors, William Emmons and Bryan Noeth, made two projections for household wealth in the future. In the more optimistic scenario, they calculated that households would quickly rebound from the recession and revert to the long-term growth trends observed from 1989 to 2010. In the less optimistic scenario, they assumed no such rebound. The authors cautioned that their projections were, well, projections, and thus uncertain.
