2021 State of Hispanic Homeownership Report
Celebrating NAHREP familia, cultura, politics, and grassroots action
March 31, 2022
Qué onda mi gente?!
NAHREP is the largest Latino business organization in the country, with a network of over 40,000 real estate professionals and 100 local chapters, made up of people who come together to grow professionally. What makes NAHREP so special, however, is that we are a mission-driven organization. The passion for advancing sustainable Hispanic homeownership that reverberates throughout our membership gives a special meaning and purpose to our work. Selling homes to Latino families isn’t just about making money, it’s about changing lives and closing the racial and ethnic wealth gap. These stories and data are at the core of our mission. And that is our State of Hispanic Homeownership Report.
At our conference, we released the 12th iteration of the State of Hispanic Homeownership Report. For the first time ever, we fully leveraged the power of our network. We conducted in-depth interviews with 25 top producing buyer agents and surveyed over six hundred agents from the NAHREP Top 250 in order to get to the bottom of the human stories behind our data. That is our superpower as an organization and we decided to lean into it.
All of you who live it every day should not be surprised that the words that were most used to describe the 2021 homeownership story in these interviews were: Family, credit, price, courageous, challenge, and low housing inventory.
We hope that all of you get a chance to read the report from cover to cover. Our team spent months obsessing over every detail because we know the power that lies in the data. But, if you don’t read the whole report, our executive summary is meant to serve as an overview of the most interesting data points and narrative.
Here are the points that I found the most interesting:
- The Latino homeownership grew amid hostile ground The Latino homeownership rate in 2021 reached 48.4%, up from 47.5% in 2019. Given the current trendline, I’m convinced that Latinos will reach a 50% homeownership rate around 2025.
- Since 2017, homeownership and household formation growth has been driven by the non-Hispanic White population: This was a shocking moment for us. Since the Great Recession, Latinos had been driving the lion’s share of both homeownership and household formation growth. However, that shifted around 2017 when the non-Hispanic White population surpassed the Latino community, a shift that coincided with falling housing inventory rates.
- Latinos are more “mortgage-ready” than ever: There are currently 8.3 million Latinos aged 45 and under who have the credit characteristics to qualify for a mortgage today. That’s a huge number. If we want to increase the Latino homeownership rate, we have got to build more homes.
- No other issue is impacting Latino homeownership more than the low supply of housing: Latinos are concentrated in areas experiencing the most severe housing inventory and affordability challenges in the nation. The two states with some of the highest home price appreciation were Arizona and Florida and housing underproduction significantly worsened in Texas and Florida.
- Institutional investors are sweeping up single-family homes: Latino would-be homebuyers are losing a significant proportion of housing stock to institutional investors. In Q3 of 2021, at least 23 percent of properties were purchased by investors in each of the top 20 most populous Latino markets. In several markets, investors purchased upwards of 38 to 39 percent of available properties.
- FHA borrowers faced the steepest challenges: Low housing inventory led to bidding wars last year. In one New Jersey market, one of NAHREP’s buyers agents reported seeing a single home receive 217 offers. Conventional borrowers, those putting in large down payments, and all-cash buyers were far better equipped to compete in last year’s market. The most popular strategy to stay competitive among our surveyed buyers agents was to convert FHA borrowers to conventional. However, for some, FHA Is the only option – Latinos are 81 percent more likely to be denied a conventional purchase loan than non-Latinos.
- Latinos want a single-family home with a yard: The only way we’re going to solve our housing inventory crisis and create more entry-level housing inventory is to build more condos and townhomes. However, our survey found that Latinos prefer a 3+ bedroom single-family home with a yard, even if that means they need to move farther away from town centers and employment. We must show first-time homebuyers that in order to start building wealth, they might need to own a condo or townhome first. Reframing the homeownership journey will likely be necessary as we won’t be building enough affordable single-family homes any time soon.
- Homeownership can bridge the wealth gap: Latino homeowners have 28 times the wealth as Latino renters. That is why we do what we do.
Download the report today. Read it, highlight it, use it, and share it. It is up to us to spread the word. Data is power.
About Noerena Limón
Noerena Limón is NAHREP’s Executive Vice President of Public Policy and Industry Relations. Noerena heads the organization’s policy and advocacy efforts on issues ranging from homeownership, housing inventory, credit access and immigration.
Prior to joining NAHREP, Noerena spent six years at the Consumer Financial Protection Bureau (CFPB) and served as a political appointee under President Obama in the White House Office of Political Affairs.