This demographic accounts for 75% of recent homeownership growth
Hispanics from all over the U.S. gathered in the nation’s capital for the National Association of Hispanic Real Estate Professionals Housing Policy and Hispanic Lending Conference.
At the opening session, Industry professionals filled every seat in the room. Speakers took the stage, welcoming the industry and throwing out remarks such as “Latino time is now a tiempo” as the crowd erupted in laughter.
Don’t understand what that means, or why it’s funny? You just made your first mistake.
The share of Hispanics in the housing market continues to grow, and will only continue to rise in the years to come. Understanding Hispanic culture will be the key to which lenders and servicers are successful with this booming demographic.
Hispanic homeownership is the driving force of U.S. homeownership growth, according to a report released at the conference Tuesday by NAHREP.
The Hispanic homeownership rate accounted for 74.9% of the net growth in overall U.S. homeownership.
The Hispanic rate of homeownership increased from 45.6% in 2015 to 46% in 2016. On the other hand, the nation’s overall homeownership rate decreased from 63.7% to 63.4%, a 51-year low. The homeownership rate for non-Hispanic whites remained flat at 71.9%, while the homeownership rate for blacks and Asians both decreased by about one full percentage point during to year to 42.2% and 55.5% respectively.
And Hispanics are faring well in other areas of the economy too. Between 2010 and 2016, Hispanics made up 76.4% of the growth in the U.S. labor force. In fact, Hispanics have a higher labor force participation rate than any other ethnic demographic at 66.1%.
Experts explained in an interview with HousingWire why homeownership is growing among this population.
“Hispanics are leading in population growth, household formations and workforce participation,” NAHREP Executive Director Marisa Calderon said. “They consistently rank owning a home as the best place to raise a family. So, they are an increasing share of the population and have the means and desire to purchase a home.”
In 2016, Hispanics accounted for 38% of new household formations in the country. This was an increase of 73% from 2000 to 15.9 million formations in 2016 and represents the largest share of household growth for any major racial or ethnic population group in the country for 2016.
And as Hispanics increasingly look toward entering the housing market, Calderon explained mortgage lenders should work to understand the cultural needs of this increasing homebuyer demographic.
“Anything consumer directed would benefit from in-language communication,” she said. “Language is part of it, but understanding cultural nuance is equally or more important. The industry really has a shortage of culturally competent professionals who can work effectively with Hispanic consumers.”
In the session, Caldron explained that 60% of Hispanics are Millennials or younger, a bilingual generation.
Saying Latinos were “a tiempo” or “on time” for the conference was funny because Hispanics are notorious for showing up late.
In order to keep the momentum moving forward on Hispanic homeownership, Mortgage Bankers Association CEO David Stevens explained to HousingWire that policy decisions will need to become less restrictive on the community.
“Although Hispanic homeownership has grown the past two years, housing policies still remain too restrictive for much of the Hispanic community,” Stevens said. “We need to continue refining current mortgage regulations and address FHA reform in order to allow lenders to better and more safely serve more qualified borrowers who may have nontraditional credit profiles.”