Hispanic Homeownership Rate Has Increased Significantly
May 8, 2017 | nella
The Hispanic population has a significant influence in residential real estate, outdoing national statistics as they purchase homes at a faster rate for the second straight year.
According to the National Association of Hispanic Real Estate Professionals’ (NAHREP) recently released 2016 State of Hispanic Homeownership Report, the Hispanic homeownership rate increased to 46 percent last year, in spite of a decreasing overall rate of homeownership across the nation. The Hispanic homeownership rate was 45.6 percent for 2015 and 45.4 percent in 2014. Over 7.3 million Hispanic households owned their homes in 2016, with 330,000 new households added – 38 percent of all households formed.
The drivers that are compelling Hispanics to purchase a home are the pursuit of the American Dream and the fact that the majority of Hispanics view homeownership as a viable investment vehicle for building wealth, as well as the ultimate place for raising children. “The significance of a strong desire for homeownership cannot be overstated,” the report states. “Where there is a will, there is generally a way.”
More members of the real estate industry are also working to meet the unique needs of Hispanic homebuyers, particularly in terms of obtaining financing. “While the Hispanic market has outgrown the ‘niche’ segment designation, the housing industry is just beginning to fully recognize its significance to the vitality of the overall market and is responding with products and services that are more relevant to the needs of Hispanic consumers,” states the report, citing recent initiatives spear-headed by Bank of America, Fannie Mae and Freddie Mac, and Wells Fargo.
Some challenges to Hispanic homeownership, such as financing and a lack of knowledge regarding Hispanic cultural norms amongst members of the housing industry, still exist. “Hispanics tend to reside in a multigenerational household of a typical nuclear family and include additional family members like grandparents or other adult relatives, all of whom contribute to household expenses,” the report states. “These influencing factors are interconnected with their culture and affect how they bank…Access to culturally competent real estate and mortgage professionals who speak Spanish and can recommend appropriate solutions to meet their needs creates a level playing field.”
For real estate professionals, Hispanics signify a sustainable and massive opportunity. Ninety percent of Hispanics favor owning a home over renting one in the future, and 62 percent are more likely to purchase a home than rent one upon their next move. In 2016, Hispanics had a purchasing power of $1.4 trillion – a number that will continue to grow as incomes and Hispanic-owned businesses increase and expand.