The wealth gap between whites and the nation's two largest minority groups have grown to their widest levels in a quarter century. (Angie Chung/MNS/Pew Research Center)
It was hard for most people to keep their wealth during the most recent recession, but it was especially tough for Hispanics.
Jose Hernandez, an El Salvadoran immigrant who owns a restaurant in Frederick, said he regrets buying a house when the market was “crazy.”
“I bought a house in 2006, one year before the recession,” Hernandez said. “Everyone was crazy about real estate. We thought everything was going to stay like that.”
To think of it now, he believes it was “a bad investment.”
The house Hernandez bought in 2006 was worth $410,000. Now he’s trying to short-sale the house for $200,000 and it’s still hard to find a buyer.
Hernandez is only one of many Hispanics who were hit hard during the crisis. According to a study published by the Pew Research Center in July, Hispanics experienced the largest decline in wealth during the recession compared to any ethnic and racial group in the U.S.
“The bursting of the housing market bubble in 2006 and the recession that followed from late 2007 to mid-2009 took a far greater toll on the wealth of minorities than whites,” researchers wrote. The study defines household wealth as the sum of assets such as houses, cars, stocks and mutual funds, etc., minus the sum of debt, which includes mortgages, auto loans, etc.
According to Pew, from 2005 to 2009, inflation-adjusted median wealth fell by 66 percent among Hispanic households and 53 percent among black households, compared with just 16 percent among white households. As a result, the typical Hispanic household had $6,325 in wealth in 2009.
Jose I. Perez, who emigrated from El Salvador in 1980, says he doesn’t feel like the situation has improved much.
“All the assets that we had, they lost value, and we haven’t gained the value back,” Perez said.
Although he calls himself “blessed” for being able to emigrate from his country amid civil war and become a legal resident in the U.S., Perez says he’s still suffering because of the economy.
He is now part owner of three restaurants in Frederick, including Cacique Restaurant, but is still having a hard time paying off bank loans he got in 2006.
“We thought we were getting out of the recession,” Perez added, “but when we started getting bad news about the economy, all the story about the budget, it seems like our customers don’t come out to spend money.”
The Latino population has risen rapidly in Frederick County and city of Frederick, according to the 2010 U.S. Census data. The county’s Hispanic population increased 267 percent from 4,664 in 2000 to 17,135. In the city of Frederick, the population surged by 271 percent from 2,533 to 9,402, amounting to about 14 percent of the city’s total population.