Hispanic Household Wealth Fell by 66% from 2005 to 2009
The Toll of the Great Recession
Median household wealth among Hispanics fell from $18,359 in 2005 to $6,325 in 2009. The percentage drop—66%—was the largest among all racial and ethnic groups, according to a new report by the Pew Research Center’s Social & Demographic Trends project. During the same period, median household wealth declined 53% among black households and 16% among white households.
The Pew Research report provides the first look at how the Great Recession impacted household wealth. It finds that plummeting house values were the principal cause of the erosion in wealth among all groups. However, because Hispanics derived nearly two-thirds of their net worth in 2005 from home equity and a disproportionate share reside in states that were in the vanguard of the housing meltdown, Hispanics were hit hardest by the housing market downturn.
The Pew Research analysis also finds that the median wealth of white households is 18 times that of Hispanic households and 20 times that of black households. These lopsided wealth ratios are the largest in the quarter century since the government first published such data, and roughly twice the size of the ratios that had prevailed between these three groups for the two decades prior to the Great Recession.
These findings are based on a Pew Research Center analysis of newly-available data from the Survey of Income and Program Participation (SIPP), an economic questionnaire distributed periodically to tens of thousands of households by the U.S. Census Bureau. It is considered the most comprehensive source of data about household wealth in the United States by race and ethnicity.
Among the report’s other key findings:
- About a third of Hispanic (31%) and black (35%) households had zero or negative net worth in 2009, compared with 15% of white households. In 2005, the comparable shares had been 23% for Hispanics, 29% for blacks and 11% for whites.
- About a quarter of all Hispanic (24%) and black (24%) households in 2009 had no assets other than a vehicle, compared with just 6% of white households. These percentages are little changed from 2005.
- During the period under study, wealth disparities also increased within the Hispanic community. The top 10% of Hispanic households saw their share of all Hispanic household wealth rise from 56% in 2005 to 72% in 2009.
The report, “Twenty to One: Wealth Gaps Rise to Record Highs Between Whites, Blacks and Hispanics,” is available on the Pew Social & Demographic Trends website.