More Hispanic Americans Are Buying Homes, Helping Stoke Hot Housing Market

By Nicole Friedman

April 20, 2021

Hispanic homeownership grew at a record pace last year, fueled by younger buyers who have helped make this demographic a growing force in the red-hot U.S. housing market.

The number of Hispanic-homeowner households rose by more than 700,000 to nearly 9 million in 2020, according to Census Bureau data compiled by the National Association of Hispanic Real Estate Professionals, an industry group. Those gains marked the biggest one-year increase in data on Hispanic homeownership going back two decades, NAHREP said.

Hispanic buyers have been a consistent source of strength in the housing market in recent years. Their buying power continues to grow as individuals enter their early 30s, the most typical years for first-time home buyers. Hispanics in the U.S. had a median age of 30 in 2019, which was about 14 years younger than the median age for non-Hispanic white Americans.

Heidy and Jonathan De La Cruz purchased a newly built home in Deltona, Fla., this spring. “It really, really feels surreal,” said Ms. De La Cruz, who is 28 years old. She said they decided to buy a home after speaking with a friend who works in real estate about the importance of homeownership.

“I know more about buying a house than my parents would, and then my daughter will know more than me,” she said.

While Hispanics make up about 18% of the country’s population, they accounted for more than half of the country’s homeownership growth in the decade leading up to the pandemic, NAHREP said. NAHREP estimated that 48% to 49% of Hispanic households owned their homes in 2020, up slightly from 47.5% in 2019 and the highest level since the mid-2000s housing boom.

That growth is expected to continue. The Urban Institute projects that between 2020 and 2040, 70% of the net new homeowner households will be Hispanic. Over that same period, it projects white and Black homeownership rates to decline. This reflects the Hispanic population’s household formation growth and youth, said Laurie Goodman, co-director of the Urban Institute’s Housing Finance Policy Center.

Hispanics and other minorities have also been disproportionately affected by the pandemic. In March, the Hispanic unemployment rate was 7.9%, compared with 6% for the U.S. overall and 5.4% for white Americans, according to the Bureau of Labor Statistics. Many Hispanic Americans worked in restaurant, hospitality and construction jobs that were among the most affected by pandemic-related lockdowns.

“It just turns out that the majority of Latinos that were considering pursuing homeownership or had the means to do so weren’t as affected by the pandemic,” said Gary Acosta, NAHREP’s chief executive. NAHREP is set to release its annual report on Hispanic homeownership Tuesday.

The Black homeownership rate also rose last year, to 45.3% from 42.1% in 2019, according to Census Bureau data, after stagnating in recent years.

The U.S. housing market has continued booming this year, with strong demand driven by low interest rates and a record-low supply of homes. That is making it especially difficult for many first-time buyers and others with limited cash for down payments to get into the market.

Ana Figueroa Aponte, a real-estate agent in Charlotte, N.C., said the majority of her clients are Hispanic and most have a budget of less than $300,000.

“In this market today, it’s very hard to find a home for them,” Ms. Figueroa Aponte said.

“They didn’t have the extra cash to go over bidding price.”

Tight credit standards and lack of fluency in English can also make the process more complicated. About one-third of Ms. Figueroa Aponte’s customers lack permanent legal status, which limits the number of lenders they can use, she said.

Myra Arenas, a real-estate agent in Houston, had a home purchase fall through last year after her clients’ jobs were affected by the pandemic.

Even so, she said 2020 was her busiest year ever, driven by a wave of Hispanic buyers. Ms. Arenas said about half her clients don’t speak English or prefer to speak with her in Spanish.

Houston; Dallas; Orlando, Fla.; Seattle and Fresno, Calif., added the most Hispanic homeowners in 2019. The metro areas with the biggest growth rate in Hispanic homeownership in 2019 included Durham, N.C.; Boise, Idaho; and Atlantic City, N.J.

The typical home bought by a Hispanic household with a mortgage in 2020 had a value of $265,000, according to NAHREP. That was below the overall median U.S. existing-home price of $313,000 in February, according to the National Association of Realtors.

Allison and Elijah Vargas, who have two daughters, found a house in Mansfield, Texas, that fit their needs under their $200,000 budget.

“We were kind of outgrowing our apartment and it’s just become really expensive to rent,” Ms. Vargas said. They bought a three-bedroom house for $185,000 in April. Once they finish repairs and move in next month, their monthly mortgage will be cheaper than their rent, Ms. Vargas said.

“It’s a stress relief for sure,” she said.

Write to Nicole Friedman at nicole.friedman@wsj.com

 Appeared in the April 21, 2021, print edition as ‘Hispanic Homeownership Surges.’