Barriers to Generational Wealth: Why Older Hispanic Homeowners Struggle to Leave a Financial Legacy

In a recent blog, based on a working paper about the ability of Hispanic homeowners to transfer housing wealth to the next generation, I examined the barriers Hispanic families face when trying to enter homeownership, including lower income and wealth, limited access to credit, and higher housing costs. In this blog, we turn to the challenges that arise after families become homeowners and the difficulty they face in transferring housing wealth to the next generation.

Hispanic Homeowners Have Less Wealth

For many older homeowners, their house is their largest asset. This is especially true for older Hispanic owners who tend to have much less wealth outside of their homes than their white peers. In 2022, Hispanic homeowners age 65 and older had only about one-tenth the median non-housing wealth of white homeowners (Figure 1).

Figure 1: Median Wealth Is Lower for Older Hispanic Homeowners Than for White Homeowners but Higher Than for Black Homeowners

Median Wealth for Homeowner Households Age 65 and Over (2022 dollars)

Notes: White, Black, and Asian/other race/multiracial householders are non-Hispanic. Hispanic householders may be of any race. Non-housing wealth includes cash savings, retirement funds, stocks and bonds, and other assets, minus debts. Median home equity and non-housing wealth are calculated independently and do not sum to median net wealth.
Source: JCHS tabulations of Federal Reserve Board, 2022 Survey of Consumer Finances.

Incomes are also lower among older Hispanic households; in 2022, Hispanic households had a median income of $41,000, far below the $55,590 median income for white households. Housing costs also remain high for those still paying a mortgage, with median monthly payments of $911 for older Hispanic homeowners, compared to $773 for white homeowners.

Older Hispanic homeowners often rely on home equity as their main financial resource but doing so is often difficult due to credit requirements, financing costs, and other barriers. Additionally, many Hispanic owners live in high-cost areas, where they have less equity. In 2022, the median equity for Hispanic homeowners was $200,000, compared to $255,000 for white owners.

Limited Reserves and Rising Costs Undermine Wealth Preservation

Compared to white owners, Hispanic homeowners have less cash on hand to invest in repairs or make upgrades to their home, which can make it difficult to build and preserve housing wealth. In 2022, Hispanic owners aged 65–74 had just $3,000 in median cash savings, compared to $31,400 for white owners. These limited reserves are attributable to the lower income and financial assets of Hispanic households combined with higher housing costs in the places Hispanic owners live. New pressures may also arise in later life, including increased healthcare expenses, more functional limitations, and new caregiving responsibilities. In combination, these mid- and late-life challenges reduce the ability to preserve housing wealth or transfer it to the next generation and reinforce racial and ethnic gaps in homeownership across generations.

Housing Debt in Retirement Results in Fewer Financial Resources for Other Needs

With less income, fewer non-housing assets, and higher housing costs, older Hispanic homeowners are more likely to carry mortgage debt into retirement than white homeowners. Nearly 40 percent of Hispanic homeowners over age 65 still had a mortgage in 2022, compared to about one-third of white homeowners. Among those with mortgage debt, Hispanic owners carried higher balances and owed more relative to their home’s value than white homeowners (Figure 2). Late-life debt increases monthly housing costs, is associated with higher rates of housing cost burden, and may indicate that owners have had fewer opportunities to build equity over time. Many also face mobility limitations or health challenges that require accessibility upgrades to age safely in their homes. Without sufficient savings to pay for these modifications or formal care, families often absorb these costs directly or provide unpaid caregiving, which can strain their own income and savings. These financial demands reduce the housing wealth older homeowners can preserve and limit what they’re able to pass down to support the next generation. Further, households that spend more of their income on housing have less money for food, medications, transportation, and other necessities. These challenges show that housing wealth alone is not enough to ensure long-term financial stability.

Figure 2: Older Hispanic Homeowners Have the Highest Mortgage Balances and Loan-to-Value Ratios Across Racial and Ethnic Groups

Notes: Hispanic householders may be of any race. White, Black, and Asian/other race householders are non-Hispanic.
Source: JCHS tabulations of Federal Reserve Board, 2022 Survey of Consumer Finances.

What Needs to Change

With limited income and few non-housing assets in later life, many older Hispanic homeowners must rely on their housing equity to cover basic expenses, caregiving needs, or emergencies. This reduces the amount of housing wealth available to support younger family members through downpayment assistance, financial gifts, or inheritance. Indeed, only 7.2 percent of Hispanic households report receiving an inheritance or financial gift, compared to 29.9 percent of white households. Without significant policy changes, this pattern is likely to persist.

Homeownership alone does not ensure long-term financial security or generational wealth for all households. Older Hispanic homeowners often face a combination of limited retirement income, elevated care needs, and persistent housing debt, factors that may constrain their ability to retain wealth and transfer it to younger generations. While more Hispanic households need access to homeownership, supporting this group also means ensuring affordability and stability throughout the homeownership lifecycle. Policies that reduce housing costs, fund accessibility upgrades, and expand financial support for caregiving may help address the challenges older Hispanic homeowners face. These efforts can also support their ability to age with greater financial and housing security and to transfer housing equity to the next generation.