{"id":2603,"date":"2021-11-02T14:31:50","date_gmt":"2021-11-02T14:31:50","guid":{"rendered":"https:\/\/www.realtrends.com\/blog\/2021\/11\/02\/optimism-abounds-for-latino-homeownership\/"},"modified":"2025-03-13T02:39:29","modified_gmt":"2025-03-13T02:39:29","slug":"optimism-abounds-for-latino-homeownership","status":"publish","type":"post","link":"https:\/\/www.realtrends.com\/blog\/2021\/11\/02\/optimism-abounds-for-latino-homeownership\/","title":{"rendered":"Optimism abounds for Latino homeownership"},"content":{"rendered":"\n<p>Unprecedented events from the past year disrupted nearly every industry and profoundly changed many facets of our society, including homeownership.&nbsp;The original fear of residential real estate tanking during the pandemic gave way to bullish seller\u2019s markets across the country.&nbsp;What about Latino homeownership?&nbsp;&nbsp;<\/p>\n\n\n\n<p>The U.S. Latino cohort is massive, and growing quickly.&nbsp;As the recent 2020 Census results revealed, Hispanics comprise 62 million people, nearly 19% of the population, and $1.5 trillion in buying power.&nbsp; These staggering numbers caught the attention of several verticals, including the real estate industry.&nbsp;<\/p>\n\n\n\n<p>In fact, during the decade leading up to the pandemic, Latinos accounted for over half (51.4%) of all homeownership growth in the United States. Unfortunately, the news is not all good.&nbsp;Despite this growing trend, Hispanics, as well as other minorities and low-income homebuyers, still face considerable barriers that hinder economic mobility.<\/p>\n\n\n\n<p>In short, demand is there but supply is a major problem. Until we address the structural issues of low housing inventory and lack of access to credit, then a democratized prosperity will continue to elude us.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-intransigent-obstacles\"><strong>Intransigent Obstacles<\/strong><\/h4>\n\n\n\n<p>With <a href=\"https:\/\/www.pewresearch.org\/fact-tank\/2018\/09\/13\/key-facts-about-young-latinos\/\" target=\"_blank\" rel=\"noreferrer noopener\">58% of the Hispanic population under the age of 35<\/a> (and with a median age of\u00a029.8), it seems some of the challenges\u00a0Latinos face are attributable to the demographic\u2019s lower average age compared to the general population. Credit scores, income, savings and household wealth all improve with age, so younger demographics face a steep climb to put the pieces together to own their own home; but the likelihood for growth over the next two decades is strong.\u00a0<\/p>\n\n\n\n<p>Low housing inventory remains one of the greatest obstacles for Latino homeownership post-pandemic. In 2020, homeowner vacancy rates dropped for the seventh consecutive year to 1%, the lowest rate ever recorded by the U.S. Census Bureau. Data from&nbsp;Realtor.com also shows that national inventory is down by nearly 40%, with an average of fewer than one million active listings nationwide in 2020.&nbsp;<\/p>\n\n\n\n<p>But even more problematic is how Latinos are disproportionately affected by these statistics. According to the <a href=\"https:\/\/www.nar.realtor\/research-and-statistics\/housing-statistics\/housing-shortage-tracker\" target=\"_blank\" rel=\"noreferrer noopener\">National Association of Realtors\u2019&nbsp;<em>Housing Shortage Tracker<\/em>,<\/a> there are six Metropolitan Statistical Areas (MSAs) that are categorized as having a high housing shortage, and four of the six MSAs have a Latino population of 20% or higher.<\/p>\n\n\n\n<p>Cost is another clear systemic barrier for Latinos aspiring to buy a home. In the top 10 most populous MSAs for Latinos in the nation, a Latino household would need to increase its median income anywhere from 5% (in Arizona) to a whopping 48.5% (in California), and with inflation rising, this becomes an even greater percentage.<\/p>\n\n\n\n<p>To surmount these hurdles, <a href=\"https:\/\/www.realtrends.com\/blog\/latino-homeownership-rates-increase-again\/\" target=\"_blank\" rel=\"noreferrer noopener\">Latinos<\/a> must rely on ingenuity and cultural norms. Without the means to make a sufficiently large down payment on a home, pooled resources tend to make sense for a group which is culturally predisposed to live in multi-generational households. Given today\u2019s inventory shortage, sharing a home among extended family members becomes&nbsp;a cultural solution to what would otherwise be an insurmountable cost barrier. But this is merely a convenient advantage, not a long-term solution to the problem of access to homeownership credit and housing inventory.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>Despite Barriers, Source of Growth is Clear<\/strong><\/h4>\n\n\n\n<p>The bottom line is that the general Anglo population is no longer large enough to fuel the country\u2019s housing growth on its own. Economic effects of the pandemic notwithstanding, the expected growth of the American housing industry will be driven primarily by Latinos in the decades to come.<\/p>\n\n\n\n<p>The Urban Institute projects that from 2020 to 2040, Latino homeowners will grow by 4.8 million, as compared to Asian homeownership growth expected at 2.7 million, and African-American at 1.2 million. In other words, Latinos will eventually account for&nbsp;70% of the homeownership growth in the United States. That\u2019s 18.7%of the population being responsible for the lion\u2019s share of housing growth.<\/p>\n\n\n\n<p>Even more surprising is where this growth is taking place \u2014 not where you\u2019d think. Beyond states with the highest Latino population density, like California, Florida and Texas, the Latino population is also booming in states like Alabama, Louisiana and Tennessee thanks to low cost of living and availability for hospitality jobs to which Latinos have traditionally flocked.&nbsp;&nbsp;<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>To Collectively Prosper, we Must First Acknowledge Issues<\/strong><\/h4>\n\n\n\n<p>Our goal is to promote homeownership opportunities for borrowers and communities that have been historically denied access to mainstream sources of credit.&nbsp;<\/p>\n\n\n\n<p>Because the barriers to Latino homeownership are structurally built into the American system, we must change that system from within. That\u2019s why in addition to providing loan capital that expands access to affordable homeownership, we\u2019re collaborating with community leaders, policymakers, and financial institutions to address housing inventory shortages disproportionately encumbering Latino residents of highly affected areas in the country.<\/p>\n\n\n\n<p>The promise of Latino homeownership growth represents nothing short of the American dream, but until we face critical issues head on, that dream won\u2019t be fulfilled.<\/p>\n\n\n\n<p><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Challenges and opportunities for Latino homeownership abound in the coming year Affordability and supply are two barriers.<\/p>\n","protected":false},"author":15802,"featured_media":4822,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[3255],"tags":[],"coauthors":[2085],"class_list":["post-2603","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-archive"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v25.4 (Yoast SEO v26.8) - 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