Hispanic home ownership is the future of the real estate industry. It's on the rise—and it couldn’t happen soon enough, as the housing market has been otherwise quite sluggish. This is a cause for celebration among real estate professionals, and many are speculating on how they can do better to accommodate this burgeoning phenomenon.
What’s causing the rise in Hispanic home ownership?
The rise of Hispanic home ownership has several contributing factors. The Hispanic population has increased overall in the U.S., accounting for approximately half of population growth in the past two decades. This has been crucial in stabilizing the labor force, and the growing populations in areas that would otherwise be facing declines or stagnation. Increased Hispanic home ownership cannot be attributed to just population growth. Hispanic Americans have made great strides in terms of income and education, and their purchasing power—and familiarity with the mortgage market—have increased tremendously. They also place great importance on home ownership, since it secures long-term wealth. There’s also a generational component, with Hispanic millennials are purchasing homes at increased rates as they enter the typical home buying age.
What are the challenges?
The rise of Hispanic home ownership is a boon for the real estate industry overall—it will give a boost to the housing market, more competition, and stabilizing population growth. Hispanic home buyers are anticipated to account for over half of all home buyers by 2030, and the industry will have to adjust to the distinct concerns of this particular demographic.
Hispanic Americans and Black Americans were and are victims of racist housing practices such as redlining and blockbusting, They also took a big hit from the 2008 financial crash. Black Americans have had the hardest time rebounding, but the Hispanic community has had their share of struggles too. Broadly speaking, Hispanic Americans will be looking for starter homes, and some people are questioning whether or not there’s enough inventory at a good price point to meet their needs.
Hispanic home ownership is on the rise in the suburbs in states like California, Florida, and Texas. They’re also venturing out these population cores and moving into suburban areas in North Carolina, Utah, and Connecticut. Gwinnett County, Georgia, has become one of the most diverse areas in the U.S. From 2012 to 2017, Hispanic home ownership rose 17 percent. This has led to an influx of new people to the area, as well as changing the makeup of leadership at the city, county, and state levels.
Looking to the future
Because all signs point to Hispanic home buyers defining the immediate future of the real estate industry, lenders are anticipating challenges and adjusting accordingly. The most obvious challenge here is a language barrier—many real estate professionals are either learning Spanish or hiring people who are fluent. However, there’s much more work to be done.
What does this look like? Most importantly, real estate professionals need to recognize that many—not all—Hispanic homebuyers are looking for affordable homes. Although the crash happened eleven years ago, its ripple effects are being felt to this day. Many prospective buyers are denied loans due to debt or poor credit history. Overall, real estate professionals are wise to learn the pain points, aspirations, and concerns of Hispanic homebuyers, as their prominence in the field is poised to skyrocket over the next decade.