Narrowing the ‘wealth gap’ for Hispanic households
Representatives from Wells Fargo and a national association for Hispanic real estate professionals discuss an effort to help families save, start businesses, and send their kids to college.
Editor’s note: Wells Fargo recently announced a $125 billion lending goal (and $10 million for financial education) over 10 years to help Hispanic families buy homes and support programs that help families save, invest, open businesses, and go to college. That goal is in support of the National Association of Hispanic Real Estate Professionals’ Hispanic Wealth Project. Brad Blackwell, head of portfolio lending for Wells Fargo Home Mortgage, and Jerry Ascencio, the chairman of the National Association of Hispanic Real Estate Professionals Foundation, discuss the effort.
What are Hispanic households facing in today’s economy?
Brad: The U.S. is experiencing a slower economic recovery for Hispanic households when compared with the general population. Economic data shows the median wealth for Hispanic households — including the value of homes, savings, stocks, and other assets minus mortgages and other credit relationships — was $13,700 in 2013, according to a Pew Research Center study. That amount is less than 10 percent of the household wealth of the non-Hispanic white population, according to the Pew Research Center, demonstrating a vast wealth gap.
Jerry: Because we’ve been concerned with this widening wealth gap, we got together in 2014 with private and public sector leaders, including Henry Cisneros, former U.S. Secretary of Housing and Urban Development; Gary Acosta, CEO of the National Association of Hispanic Real Estate Professionals; Brad from Wells Fargo; and others to form a new approach that creates solutions for Hispanic households. The result is the Hispanic Wealth Project Blueprint document — the playbook guiding our work to triple the wealth of Hispanic households over the next decade.
Why is this important to do now?
Brad: Our country’s population is projected to grow. According to the U.S. Census Bureau in the next 10 years, 76 percent of newly formed households nationwide (in which one or more people live together in the same housing unit) will be minority households, and 40 percent of those will be Hispanic families. We immediately signed on to support the project because it will benefit communities across the U.S.
Jerry: In fact, a 2014 study by the Urban Institute projects Hispanic households will account for 55.5 percent of new homeowners from 2010 to 2020. In our view, that’s an ecosystem for wealth creation. For most Americans — and for Hispanic Americans, in particular — homeownership and household wealth are intertwined with employment, income, credit, savings, and more. They’re all interdependent. Therefore, the Hispanic Wealth Project Blueprint emphasizes bringing awareness, education, and focus to the specific areas of homeownership, entrepreneurship, savings, and investment.
Our call to action includes corporations, think tanks, and foundations as well as trade associations and entrepreneurs who want to make a difference in the Hispanic community and help us drive our goal forward. Read the NAHREP Hispanic Wealth Project Blueprint to learn how to join this movement.
What’s essential for success?
Brad: Collaboration. When there is productive public-private collaboration, it’s amazing what can be accomplished for the community. For instance, our LIFT programs with NeighborWorks America have provided down payment assistance and homebuyer education to more than 10,250 homeowners. For example, The Velasquezes in Fresno, California, are one of those homeowners and were able to buy a home with a yard for their kids.
Jerry: Financial education and access to credit. Accumulating wealth depends on both, but getting that access can feel complicated. Wells Fargo’s support for home lending, saving, investing, financing college, hiring, and nonprofits, through its $125 billion goal certainly will help. I know that level of support will make a difference and we’ll have many more heart-warming stories like the Velasquezes.
In their case, homeownership puts them on a path to accumulating wealth and leaving a legacy for their children. In teaming up with Wells Fargo and so many others in the Hispanic Wealth Project, we’re confident we’ll be able to create thousands more stories of Hispanic households growing wealth through homeownership, entrepreneurship, saving, and investing.