Latino Households Propel Home Sales
April 21, 2021
Hispanic homeownership continued to climb to a record level last year, continuing a decade-long trend even during the COVID-19 pandemic.
Hispanics comprise about 18% of the nation’s population but have accounted for more than half of the country’s homeownership growth over the past decade, according to the Urban Institute. They’re expected to grow their homeownership numbers, said the Urban Institute, which estimates that 70% of net new homeowner households will be Hispanic over the next 20 years, through 2040.
More than 600,000 Latinos purchased a home with a mortgage last year, 13% higher than in 2019, according to the latest Census Bureau data analyzed by the National Association of Hispanic Real Estate Professionals.
“Despite significant headwinds, Latinos drove homeownership growth in America for the sixth consecutive year,” says Gary Acosta, NAHREP co-founder and CEO. “This was especially consequential in 2020 because it was housing more than any other sector that pulled the country out of the coronavirus-induced recession.”
Homeownership is paving the way to helping build long-term wealth, too. Property equity comprises 57.6% of Latinos’ wealth, and those who have owned their homes have a median net worth of $164,000. That is significantly higher than $36,050 for Latino families overall, according to the NAHREP study.
“For Latino households, owning a home is a central part of building a solid financial foundation, and increasing wealth over time,” says George Ratiu, realtor.com®’s senior economist. “This preference became even more important during 2020, as the COVID pandemic accelerated many people’s reach for the safety of a home and the space to work, live, and school children.”
Latino households are more than three times likely to live in a multigenerational household than the rest of the population. More than half—53%—of Hispanic buyers say they would prefer to live in a multigenerational home.
"Reflecting the economic challenges brought about by the pandemic, and building upon the cultural central place of the family, Latino households invested in multigenerational homes at a higher rate," says Ratiu.
But the housing market has not been easy for newcomers or those with homebuying experience. Rapidly rising home prices and tight housing inventories have made homeownership challenging for a new number of buyers. Tight credit standards and language barriers also are complicating the homebuying process for some buyers.
Latinos have a median credit score of 668, a median debt-to-income ratio of 41%, and average down payments of 3.5%, according to the NAHREP report.
The typical home purchased by a Hispanic household with a mortgage in 2020 had a value of $265,000, according to NAHREP. That is below the national median of $313,000, which the National Association of REALTORS® reported in February based on sold U.S. existing homes.
The areas that added the most Hispanic homeowners in 2019 were Houston; Dallas; Orlando, Fla.; Seattle; and Fresno, Calif. The metro areas that saw the largest growth in Hispanic households in 2019 were Durham, N.C.; Boise, Idaho; and Atlantic City, N.J.
National Association of Hispanic Real Estate Professionals; “More Hispanic Americans Are Buying Homes, Helping Stoke Hot Housing Market,” The Wall Street Journal (April 20, 2021) [Log-in required.] and “Why More Latinos Became Homeowners During the Pandemic,” realtor.com® (April 20, 2021)
Updated: May 14, 2021