The National Association of Hispanic Real Estate Professionals (NAHREP) hosted its annual Housing Policy and Hispanic Lending Conference at the end of February in Washington, D.C. The three-day conference featured a number of speakers and panel discussions on issues affecting this growing segment of the housing market.
Every year at the conference, NAHREP releases its annual report on the state of Hispanic homeownership in partnership with the Hispanic Wealth Project (HWP). There’s a lot of good information in the 28-page report, but if you haven’t had time to read the whole thing yet, we’ve got the highlights here.
A Look at the Hispanic Population
Before we get into the impact of this group on housing, let’s take a look at some important things to know about the Hispanic population as a whole.
The number of people with a Hispanic background in the U.S. currently stands at 58.6 million. This is America’s fastest-growing demographic.
While more than half of the country’s Hispanic residents continue to call either California, Texas or Florida home, the fastest-growing Latino markets in the country are in Russell County, Alabama; Bryan County, Georgia; and Luzerne County, Pennsylvania.
Hispanics accounted for 79.7% of growth in the labor force between 2007 and 2017. Although initial growth in the Hispanic population of the U.S. was driven by ‘90s-era immigration, the majority of the population growth in recent years has come from these initial immigrants starting families here. It’s expected that this growth will continue, with the population accounting for 119 million people by 2060.
This family growth shows in the age of the Hispanic population, where 30% are millennials.
Many Hispanics are now bilingual by choice. These consumers tend to prefer to work with someone who demonstrates a comfort with their culture.
In terms of living arrangements, 32% of Latino millennials live at home with their parents, and family is very important in helping many Hispanics make purchasing decisions.
Hispanics and the Housing Market
Among the Latino population, 46.2% of people owned a home in 2017, up from 46.0% in 2016. The U.S. homeownership rate grew for the first time in 13 years last year, rising from 63.4% to 63.9% in 2017. Hispanic homeowners accounted for 15% of this growth.
It’s also worth noting that while other demographic groups had sometimes seen their homeownership rate drop in recent years, the share of Latino homeowners has been steadily growing. In fact, this accounted for 46.5% of homeownership growth since 2000. It’s also the only group that saw its homeownership rate increase for three consecutive years.
Last year, the Hispanic population formed 265,000 new households, which accounted for 28.6% of total household growth across the country. These households tend to be fairly large. At an average household size of 3.25, Latinos have the largest household size of any racial or ethnic group in the U.S.
Hispanic Concerns About Homeownership
Ownership is on the uptick, but there are things that Latino residents see as a potential threat to future homeownership prospects. There are three major concerns that they have.
First is the shortage of affordable housing. This is particularly acute for this group because there are some very expensive areas of California, Texas and Florida, which is where the majority live. In addition, most Hispanics believe that mortgage rates are going to rise and that home prices are likely to keep going up as well. NAHREP believes this can be addressed by simply building more housing in these areas, which is likely to happen because demand supports it.
Hispanics are also especially concerned about the possibility of prolonged natural disasters, which is keeping homeownership down among the group. One of NAHREP’s goals is to push for further disaster relief support for Florida, Texas, California and Puerto Rico.
Finally, Hispanics are concerned about uncertainty over future immigration policy. NAHREP plans to address this by pushing for comprehensive immigration reform.
Supporting Homeownership in the Future
Beyond these challenges, there’s a huge opportunity for real estate professionals to help serve Latino consumers by dispelling some misconceptions.
For instance, according to the report from NAHREP, most Hispanic consumers believe that they need a 20% down payment, leading them to believe they’d have a hard time saving enough. In reality, there are a number of low down payment options available.
Another major concern for Hispanic homeowners is the closing costs associated with the mortgage, but it’s possible to roll some of these into the loan if necessary.
Other major concerns include whether they can afford the monthly payment and whether they’re ready from a credit standpoint. NAHREP believes real estate professionals should play an active role in educating their current and prospective clients on these issues, as it will have a positive impact on buyers.
Hopefully, this has given you more insight into the growing market of Hispanic homeowners. Real estate agents can check out RealEstate.QuickenLoans.com for more real estate topics.
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