Hispanic Homeownership Gap Explained in New Report

May 20, 2022 | by Katie Claflin

Categories: First Time Buyer, Homeownership

While Latinos have experienced sustained homeownership growth over the past several years, significant barriers continue to prevent them from purchasing homes at rates on par with white households.

That's the takeaway from the recent State of Hispanic Homeownership Report produced by the National Association of Hispanic Real Estate Professionals.

Here are a few significant findings from the report:

1. The Hispanic homeownership rate increased to 48.4% in 2021--up from 47.5% in 2020-- and is likely to reach 50% by 2025.
2. However, the percentage of new Hispanic homeowners relative to non-Hispanic white homeowners has consistently declined since 2017.
3. In 2021, 54.4% of new homeowners identified as non-Hispanic white, compared to only 18.1% who identified as Hispanic.

The report lists the following primary reasons for the recent lag in Hispanic homeownership rates:

1. Latinos are the youngest of any racial or ethnic demographic. They also tend to buy homes younger than other demographics and are therefore more likely to be first-time home buyers.
2. Housing underproduction combined with rapid home appreciation quickly led to affordability challenges, which were more prominent in states with high Latino populations.
3. As first-time buyers, Hispanic buyers were also more likely to utilize low down payment products, and bidding wars often created a strong seller bias toward large down payments or all-cash offers.

But it's not all bad news.  The report concludes with a few optimistic findings as well:

1. Despite extraordinary market challenges, many Hispanic households still found a path to homeownership. For example, 44% reported working longer hours, 39% took on an extra job, and 38% continued to drive an older car, all to save money for a down payment.
2. Hispanic households that already owned a home experienced exponential wealth creation thanks to rising home prices.  For example, in the top 5 most populous Latino counties (which includes Harris County), the average home equity in 2021 was over $300,000.

Addressing the Racial Homeownership Gap

TSAHC recognizes the barriers facing Hispanic buyers and other households of color. Our programs work to increase the supply of affordable housing inventory while also providing down payment products to help lower income and minority buyers bolster their down payment and increase their purchasing power.  For example, 41% of the households utilizing our down payment assistance products in 2021 identified as Hispanic-- the largest percentage of any demographic.

Through our Affordable Communities of Texas (ACT) program, we also recently provided first-time buyers Josh and Yolanda Rodriguez with a brand new affordable home in San Antonio.  Learn more about their story here.

 

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