I've been house hunting for more than a year (in Orange County, CA) so anything real estate- related catches my eye. Recently, I came across the State of Hispanic Homeownership Report by the National Association of Hispanic Real Estate Professionals (NAHREP) and—as a Latina—it was great to see that there has been a slight increase of Latino homeownership since last year.
In 2017, 46.2% of Latinos in the U.S. owned a home—more than 7 million in total. Hispanics are the only demographic to have increased their rate of homeownership for the last three consecutive years.
There were also many other interesting statistics in this report that tell the story about how cultural nuances, purchase power, and trends shape the story of Hispanic homeownership in the U.S.—as well as the challenges that could keep some from getting a key to their dream home.
The Dueños: Who Are They?
The profile of Hispanic households can be described as multigenerational (average household size of 3.25), and most married households (60%) are comprised of at least two parents and one child under the age of 18.
By comparison, only 39.5% of total U.S. married households have at least one minor child. Over 30% of Hispanic millennials live at home with their parents, more than in any other living arrangement and compared with 20% of their generation overall.
Hispanic Homeownership Around The Nation
The rate of Hispanic homeownership above the U.S. national average (63.9%) is found in 23 states, including states with a large Hispanic population such as California (42.4%), Texas (56.5%), and Florida (50.9%), New Mexico (65.5%), and Arizona (50.6%).
A few break out surprises, the rate of Hispanic homeownership also exceeded the national average in some states with a population of only 10% Hispanics: Wyoming (56%), Oklahoma (50.3%), Maryland (48.4%), and Nebraska (46.7%). States like Kansas, Iowa, and Utah have also seen large population growth in recent years, driven primarily by Hispanics. This is mainly due to the availability of jobs and affordable housing.
It's not surprising that these other areas are getting on the community's radar as traditional Hispanic hotspots get more crowded and unaffordable, and the spirit of the Latino drives them forward to seek out better opportunities for their families.
Hispanics Still Face Some Barriers
One in four Hispanics believes it's a good time to buy a home. That's compared to 68% of the general population, according to the National Association of Realtors 2018 Q1 HOME Survey.
Still, 60% of Hispanics believe their financial situations will improve—which could be a result of the median household income for Hispanics increasing 4.3% to $47,675 in 2017, while the number in poverty further declined to 19.4%.
Interestingly, Hispanic Millennials actually out-earn their Boomer counterparts by 29%, while non-Hispanic White Millennials have lost ground on income generation (-21%) as compared to their Boomer counterparts.
While 81% of Hispanics are aspirational and believe that owning a home is a good investment long term, 56% think it would be difficult to get a home mortgage. They also perceive obstacles in their way, including:
- Insufficient credit score or history
- Affording the down payment or closing costs
- Insufficient income for monthly payments
The NAHREP report points out that a few macro issues directly impacted Hispanic communities across the country last year, such as the continued lack of affordable housing inventory and natural disasters concentrated in the nation's most populous Hispanic states. Prices in cities such as Las Vegas, San Diego, and Houston increased, making many homes out of reach, and the aftermath of disasters such as the California wildfires and Hurricanes Harvey and Irma are undoubtedly having an impact on Hispanic homeownership, according to NAHREP.
What Will Keep Hispanic Homeownership Growing?
The good news is that despite some of these issues, there were more Hispanic homeowners in 2017. Some of the suggestions offered by the NAHREP to ensure the opportunity for other Hispanics to become homeowners are:
- Simplifying disaster relief from organizations like the Federal Emergency Management Agency and U.S. Department of Housing and Urban Development.
- Addressing the inventory shortage of affordable homes, which they term as "crisis level" at this point.
- Legislators must resolve the debate on immigration reform and the Deferred Action for Childhood Arrivals (more widely known as DACA) as the uncertainty is likely impeding many Hispanics from pursuing homeownership.
- More transparent and widely accessible methods of credit scoring to qualify individuals for homeownership. The NAHREP believes the current credit scoring model used in the industry does not take into account positive credit attributes that could lift many Hispanics' creditworthiness, such as paying a cell phone bill on time.
Want to instantly increase your credit score? Experian Boost™ helps by giving you credit for the utility and mobile phone bills you're already paying. Until now, those payments did not positively impact your score.
This service is completely free and can boost your credit scores fast by using your own positive payment history. It can also help those with poor or limited credit situations. Other services such as credit repair may cost you up to thousands and only help remove inaccuracies from your credit report.