Everyone has a responsibility to help Hispanic homebuyers realize their dream of homeownership, writes ERA’s Alex Vidal.
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as Grandsons and nephews of Cuban political prisoners who fled the country in the 1960s, I was really excited to read 2023 NAHREP Hispanic Homeownership Report.
The report, now in its fourteenth year, is a product of the National Association of Hispanic Real Estate Professionals (NAHREP) and the Hispanic Wealth Project. It combines research from multiple data sources to understand the growth of Hispanic homeownership in the United States and identify opportunities and barriers to increasing Latino homeownership.
Of course, I focused on the growth in homeownership in my report because I know how important it was to my parents to become homeowners, who gave it all up when they left Cuba for Miami. In 2023, the Hispanic homeownership rate reached 49.5%, a net increase of 377,000 Latino owner households compared with the previous year. Today, more than 9.5 million Hispanic families own their own homes.
This is really good news and makes me smile.
When I combine this good news with some data from NAHREP 2023 Hispanic Wealth Report When it came out earlier this year, I laughed even harder. When the Hispanic Wealth Plan began this work in 2014, the goal was to triple the median Hispanic household wealth by 2024.
Achieving this goal two years ahead of schedule is a testament to the commitment of the countless people who have contributed to this effort. In 2022, Hispanic household wealth rose to $63,400. In 2013, that number was $19,998.
As a result, the proportional wealth gap between Hispanic and non-Hispanic white households has shrunk in half.
How homeownership and wealth rates align
What’s exciting about the growth in Hispanic wealth is that a lot of it is likely related to rising homeownership rates, and as a real estate practitioner, I can support that. In 2013, Latinos’ home equity accounted for just over a quarter of their net worth (26.7%).
By 2022, one-third of Hispanic household wealth can be attributed to home equity, or equity held in a primary residence—a significant increase.
Homeownership has been the primary source of wealth for all American families for decades. Therefore, increasing Hispanic homeownership rates is critical.
In 2013, the Hispanic homeownership rate hovered around 46.1%. The Hispanic Wealth Plan seeks to increase Hispanic homeownership to 50%, and excitingly we are just shy of that goal, with a homeownership rate of 49.5%.
That’s just two-tenths of a percentage point shy of the highest Hispanic homeownership rate to date (49.7 percent in 2006 and 2007). We are very close to achieving our 50% goal.
Hispanic customers present an untapped opportunity
Becoming a homeowner has become more difficult due to the challenges between high interest rates, rising home prices, and low inventory. But it’s important for all of us in the real estate industry to understand the tremendous opportunities that come with working with Hispanic clients.
Latinos are driving household formation growth in this country and are willing to relocate as they are priced out of expensive markets. They are also more willing to enter into co-borrower or co-occupant arrangements.
Finally, there are many local financial incentives and programs that can help ease the financial burden of buying a home, especially for first-time homebuyers.
So, what does this mean? It may take some creative problem-solving to help Hispanic clients purchase a home. To this end, I encourage everyone in the real estate industry to be part of the solution and achieve 50% homeownership.
Alex Vidal is President of ERA Real Estate.
