Hispanic homeownership rates increased in recent years, driven by strong cultural values and a willingness to move to where affordable houses are.
Hispanic homeownership rates are increasing in the U.S. despite the challenges of the current real estate market. Like all homebuyers throughout the country, Hispanic homebuyers faced skyrocketing prices, competition from all-cash buyers and investors, and a limited number of available houses.
Nonetheless, the number of Hispanic-owned households in the U.S. has grown consistently, more than doubling between 2000 and 2021 from 4.2 million to 8.8 million, according to the National Association of Hispanic Real Estate Professionals (of which I am the co-founder and CEO).
Here are three reasons why Hispanic homebuyers continued to see success during these tumultuous years and why the Hispanic homeownership rate will continue to increase.
Hispanic homeownership rates reflect deep cultural values
The rapid increase in Hispanic homeownership rates also reflects the fact that Latinos are family centered, and the home is the center of the family experience.
For Hispanic immigrants who come to the U.S. in search of prosperity and a better life, homeownership is still tied closely to the American dream. Indeed, being able to purchase a home they can share with their families is a pillar of that achievement.
The Hispanic population in the U.S. is young
There are more than 60 million Latinos in the U.S., composing about 20% of the total population. In addition, the average age of Latinos in the U.S. is 29. That means that there are millions of people in the Latino community who are entering their prime home-buying years.
People typically look to purchase homes in their early to late thirties as they establish themselves in their careers and put down roots for their families. As Latinos in their late twenties and thirties enter the real estate market, we’ll see Hispanic homeownership rates rise.
Hispanic homebuyers will go where homes are affordable
One of the biggest stories out of the housing market in the past several years has been skyrocketing home prices. First-time homebuyers in particular have been priced out of popular markets as demand has driven up the property values.
However, Hispanic homebuyers are willing to move if it means they’ll be more likely to afford a home. They’ll migrate to where there are jobs, affordable houses and more economic opportunities in order to achieve their homeownership goals.
That’s why we’ve seen a large number of Hispanics purchasing properties in places such as Milwaukee, Des Moines, and other cities in the Midwest and South, where housing costs have so far remained attainable.
Hispanic homeownership rates remained strong despite pandemic challenges
The Hispanic home-buying community has not been immune to the challenges of the housing market. Indeed, these homebuyers have succeeded despite market conditions.
Additionally, Latinos are twice as likely as other communities to have a small business in the household, and self-employed homebuyers can face more hurdles to qualifying for a mortgage. This was especially true during the pandemic, when lending guidelines became stricter for self-employed borrowers, who some lenders perceive as higher risk.
It’s also important to note that a wealth gap still exists. Latinos have the highest workforce participation rate in the country but, on average, hold a sixth of the wealth of the rest of the population. Because of this, they are sometimes more likely to need no- or low-down-payment mortgages or down payment assistance* in order to qualify for a mortgage.
Regardless, the cultural value of homeownership motivates many Latinos to do whatever it takes to achieve that goal, whether it’s moving to a new city or state or cosigning loans with family members to be able to afford a home, and it is that determination that will continue to drive Hispanic homeownership in the U.S. and allow Hispanic families to thrive.
*Eligibility subject to program stipulations, qualifying factors, applicable income and debt-to-income (DTI) restrictions, and property limits.
Copyright©2022 Fairway Independent Mortgage Corporation. NMLS#2289. 4750 S. Biltmore Lane, Madison, WI 53718, 1-866-912-4800. All rights reserved. Fairway is not affiliated with any government agencies. This is not an offer to enter into an agreement. Not all customers will qualify. Information, rates and programs are subject to change without notice. All products are subject to credit and property approval. Other restrictions and limitations may apply. Equal Housing Opportunity.
Fairway is required to disclose the following license information. AZ License #BK-0904162; Licensed by the Department of Financial Protection and Innovation under the California Residential Mortgage Lending Act, License No 41DBO-78367. Licensed by the Department of Financial Protection and Innovation under the California Financing Law, NMLS #2289. Loans made or arranged pursuant to a California Residential Mortgage Lending Act License; Georgia Residential Mortgage Licensee #21158; For licensing information, go to www.nmlsconsumeraccess.org; MA Mortgage Broker and Lender License #MC2289; Licensed Nevada Mortgage Lender; Licensed by the NJ Department of Banking and Insurance; Licensed Mortgage Banker-NYS Department of Financial Services; Rhode Island Licensed Broker & Lender; Fairway Independent Mortgage Corporation NMLS ID #2289 (www.nmlsconsumeraccess.org).