By Nicole Akoukou Thompson

The thriving U.S. Latino population is earning more and gaining influences amid the mainstream, but home ownership for the community has dipped. Could this be due to cultural spending habits and an aversion to acquiring credit?

There are 54 million Hispanics/Latinos in the U.S., constituting 17 percent of the nation’s total population. Income trends for the mounting population have shown increases and Hispanic consumer attitude increasingly sways mainstream opinion, but homeownership rate has dropped for the diverse community. According to the State of Hispanic Homeownership Report published by the National Association of Hispanic Real Estate, homeownership rates for U.S. Latinos settled at 45.4 percent in 2014, which is the lowest it’s been since 2000. Also, it’s marked the first time home ownership rates fell below 46 percent in 14 years. Hispanic homeownership peaked in 2007, climaxing at 49.7 percent.

“The State of Hispanic Homeownership Report shows gains in employment, education and income for Latinos, representing the huge influence Latinos have, not only in the housing market but on the U.S. economy as a whole,” Gary Acosta, NAHREP co-founder and CEO, said in a statement. “Access to affordable mortgages for Latino homebuyers would help sustain a healthy housing market and benefit a general economic recovery across the board.”

Last year, research confirmed that Hispanics are the only racial/ethnic group to see a decline in its poverty rate. Nonetheless, the NAHREP report hints that conventional pathways toward homeownership don’t culturally align with Hispanics, who handle finances differently than the mainstream. Firstly, Latinos are among the most unbanked ethnic groups in the nation. Citizenship concerns and racial discrimination sometimes play a role when seeking out assistance from banks, so many don’t depend on a bank when financing a new business or purchasing a home.

Instead, they save, put away paychecks and borrow from relatives. Also, young Latinos are adventurous bankers and seek out non-traditional banking institutions. This has led to many U.S. Latinos being labeled “credit invisible,” which is a term the federal Consumer Finance Protection Bureau (CFPB) applies to individuals who don’t have enough credit history for lenders to track, or they don’t have a credit history at all. Hispanics and African Americans are less visible when it comes to credit; approximately 15 percent of both groups have credit invisibility, compared to 9 percent of whites. Lack of credit, not bad credit, keeps many Hispanic mortgage applicants from approval. In 2013, Hispanic mortgage applicants were denied home loans at twice the rate of white applicants because of cultural spending habits that pilot Hispanics away from credit.

“Latinos as borrowers may have different underwriting needs. They may have multiple family members living together, multiple wage earners contributing to household income, or they may be self-employed or hold more than one job,” said Mortgage Bankers Association CEO David Stevens about this in the NAHREP’s report. “Adequate underwriting for these borrowers, who are a key demographic driving homeownership demand, requires prudent judgment and keen understanding of their ability to pay, if we are to expand credit access successfully to a greater number of well-qualified and creditworthy homebuyers.”

Ultimately, homeownership for Hispanics has been positive, according to the NAHREP report, but it is lower than in previous years, also due to a shortage of affordable housing inventory. Lack of access to low down payment homes is likely the lead contributor to modest home ownership gains. Nevertheless, the Hispanic population is widely recognized as the key driver for growth in the overall housing sector. Thus, barriers that impede Hispanic participation in the homeownership market weaken all segments of the housing industry.

“There is little evidence that the industry as a whole has done much to address the unique nuances of many Hispanic homebuyers,” said the report.

Seemingly, Hispanic millennials should be able to better acquire home ownership because they’re more likely to have a credit history, but the NAHREP report indicated that only 21 percent possess near-term plans to obtain a mortgage. Nearly half of Hispanic millennials (46 percent) stated that affordability was required for homeownership, compared to 37 percent of non-Hispanic respondents. Also, 32 percent of Hispanic millennials don’t have sufficient savings for a down payment, compared to 23 percent of non-Hispanics.