The number of Hispanic-owned households, along with Hispanic homeownership rates, have increased, while overall homeownership rates across the country have decreased.
The National Association of Hispanic Real Estate Professionals® (NAHREP) recently released the 2015 State of Hispanic Homeownership Report®, which stated that Hispanic homeownership rate had an average of 45.6 percent in 2015, which is 0.2 percent higher than in 2014.
However, comparing the fourth quarter of 2014 to the fourth quarter of 2015, there is an increase of 2.2 percent.
A net increase of 245,000 Hispanic-owned households in 2015 accounted for 69 percent of the total net growth in homeownership in the country. In the same year, the Hispanic population reached a new high of 57 million, or 18 percent of the total population, an increase of 1.6 million from 2014’s data. Additionally, Hispanic household growth is expected to continue to grow by as much as 5.7 million additional households over the next 10 years.
There are several reasons why Hispanics have increased their homeownership in the past few years. More Hispanics are financially secure with employment. According to the report, from 2012-2014, Hispanics were the only major population group that both decreased their poverty rate and increased their annual household income. Between 2000-2015, Hispanics made up two-thirds of the growth in the nation’s labor force, and 73 percent of the growth in the number of workers employed.
Accordingly, the median income of Hispanic households rose 7.3 percent from $39,600 in 2012 to $42,492 in 2014. In 2010, the purchasing power of Hispanics was $1 trillion. In 2015, that number rose to $1.5 trillion, a 50 percent increase. By 2020, it’s expected to surpass $2 trillion.
Millennials are definitely an asset for Hispanic homeownership growth. According to the report, thanks to higher household incomes and levels of education, they are typically able to buy homes earlier than other millennial groups. The report stated that 50 percent of second-generation Hispanics are already homeowners.
However, there are some roadblocks for potential Hispanic homeowners. Many struggle to find affordable mortgage credits. And with housing inventory still low, finding affordable housing can be an issue as well.
Ultimately though, it is expected that 52 percent of new homeowners between 2010-2030 will be Hispanic.