2019 marks fifth straight year of Hispanic homeownership growth rates
A recently released study from the National Association of Hispanic Real Estate Professionals (NAHREP) has revealed that 2019 marked the fifth straight year of gains in the Hispanic homeownership rate.According to the 2019 State of Hispanic Homeownership Report, which was produced by NAHREP with contributions from the Urban Institute and the National Association of Home Builders (NAHB), Hispanics are the only demographic who have posted five consecutive years of homeownership rate increases.
Gary Acosta, co-founder and CEO of NAHREP, credited the ongoing growth to “strong gains in household income coupled with an overwhelming drive for homeownership.”
The Hispanic homeownership rate in 2019 was at 47.5%, or 4,242,000 Hispanic owner households. That’s up 0.4 percentage points from 2018 and up 1.9 points from 2015. And there were 435,000 new Hispanic household formations in 2019, 31.4% of net growth.
More homeownership gains could be coming for the Hispanic community in the years ahead. More than 60% of Latinos are millennials or younger, per the U.S. Census Bureau.
“The youthfulness, work ethic and resilience of the Hispanic community will play a critical role in the revitalization of America’s post-pandemic economy,” Acosta said.
The report also noted that while most Latinos rely on low downpayment products to purchase homes (median down among Hispanic homebuyers was 3.5%, compared to 10% for the general population), the share of Hispanic buyers using conventional financing has grown. Between 2013 to 2018, usage of conventional loan products shot up from 45.6% to 57.6%; meanwhile, the share of Hispanic buyers using mortgages backed by the Federal Housing Administration (FHA) fell from 42.5% to 32.8%.
Still, Hispanics remain more than twice as likely to use FHA loans compared to non-Hispanic white buyers. According to the report, that disparity is still a concern, “as FHA-insured loans can be costlier than conventional financing. This has the capacity to limit lifetime wealth building potential.”