Hispanics Segment Summary May 2012
Source: 2010–11 MacroMonitor
Hispanic household heads self-identify as Hispanic or Latino. Because the MacroMonitor is available in English only, Hispanic respondents are English capable—a population of acculturated Hispanic households. Other studies—such as GfK MRI's Survey of the American Consumer—that are in both English and Spanish show that financial-services use is more prevalent among acculturated households than among nonacculturated households. The 15 million Hispanic households in the MacroMonitor compare closely with the projected number of Hispanic households in the Bureau of Labor Statistics' 2010 Consumer Expenditure Study; one should take care when extending these findings beyond households that include English-speaking household heads.
- Hispanics' average age is 44—the youngest of all races or ethnic groups in the United States.
- Sixty-two percent of Hispanic household heads are members of Generations X and Y.
- Twenty-three percent of Hispanic household heads are single (never married); 16% report they cohabit (are not married). Fewer Hispanic households have a married head (43%) than do all US households.
- Hispanics' mean income, $59K (median income, $34K), is lower than for all US households (mean $67K, median $45K).
- Hispanics are less likely than all US households to have a four-year-college degree (14%, in comparison with 20%); they are more likely than average to have less than a high school diploma (45% in comparison with 38%) and more likely than average to have only a high school diploma.
- Hispanic households are significantly more likely than average to have dependent children: 48% do so.
- Hispanic households are more likely than all households to live in an apartment (22%) and less likely than average to live in a single-family home (59%, in comparison with 65%).
- Hispanic households are more likely than average to live in a large (28%) or medium-size (30%) city and less likely to live in a small city, town, or other rural area (17%).
Financial Products and Services
- Assets: Not unexpectedly, Hispanic households are less likely than all US households to own most assets; the average balances for assets they do own tend to be lower than those of all US households. Assets they are just as likely as all households to own are custodial accounts, 401k/403b/457 accounts, a business, and other real estate (not a primary residence).
- Debts: Hispanic households are less likely than all US households to have a first mortgage (36%) or HELOC (7%). They are more likely than average to be debt free (29%). However, for households with debt, balances are higher than average.
- Insurance: Hispanic households are less likely than average to own any property or casualty insurance (82%), life insurance (52%), or health insurance (59%). Especially low is their ownership of homeowner/renters (53%), individual life (30%), and group health (39%) insurance.
- Hispanic households are more likely than average to worry that they won't be able to get a loan and about the safety of deposits. The majority (53%) believe that they are living on the edge. Roughly half believe—optimistically—that the next generation will be better off than theirs.
- Hispanic households are less likely than average to agree that they are in a position to meet their long-term financial goals. Of potential concern, two-thirds would be open to mortgages with an interest rate that would change, and 60% would not continue to make payments if the mortgage is more than their home is worth.
- Only a third of Hispanic households have at least one legal document—such as a will, living will, or power of attorney—in place. That number is below average for all households.
- After Caucasian (non-Hispanic) households, Hispanic households control more financial assets ($1.7 trillion) and investable assets ($1.2 trillion) than any other US ethnic population. They also have more liabilities ($1.6 trillion) and more equity in their homes ($1.7 trillion).
- Controlling their finances, a majority of Hispanic households say they are self-reliant (59%), collaborators (16%), and delegators (3%). Yet, a fifth (21%) of self-reliant households used a financial professional in the past two years. One in four households (26%) say they would prefer to collaborate with a financial professional.
Financial institutions with a strategy for serving Hispanic households are well served because, at present, they represent the largest ethnic population in the United States—a significant opportunity for financial-services providers. Acculturated Hispanic households differ from other groups (African Americans, Asians, and others) in their demographics, balance sheets, and attitudes. Data suggest they are less trustful of financial institutions and intermediaries, more optimistic about the future, and more receptive to personal interaction than are other ethnic groups.
To determine which Hispanic households to serve (acculturated or nonacculturated), financial-services providers need to recognize that the subsegments are not the same. The more acculturated they are, the less their product and service marketing needs differ from those of the mainstream. However, if the goal is to initiate and develop relationships with less-acculturated segments, one idea is to develop different strategies for the first generation than for the second or third.
A study of Spanish-speaking households is necessary for a full understanding of less-acculturated Hispanics and the changes that occur as they adjust to life in the United States. To learn more about acculturated Hispanic households, please contact CFD.