New NAHREP Report Finds Homeownership Growth Continues Eight-Year Trajectory
Despite record-breaking affordability challenges
SAN DIEGO— March 14, 2023—The National Association of Hispanic Real Estate Professionals® released the 2022 State of Hispanic Homeownership Report today which examines the progress made in the last year toward the organization’s mission of increasing sustainable Hispanic homeownership. The release of the report coincides with the start of the second part of NAHREP’s Homeownership & Wealth Building Conference which resumes today and runs until Wednesday, March 15.
In 2022, the Hispanic homeownership rate increased to 48.6 percent, consistent with the trendline of the past eight years. These homeownership gains came despite a tight housing market and affordability challenges that impacted first-time homebuyers. Home price appreciation hit a record high of 20.1 percent and interest rates escalated to over 7 percent. However, Latinos still managed to add 349,000 homeowner households, one of this demographic’s largest single-year gains over the last 10 years. Latinos will remain critical drivers to U.S. homeownership growth, given their youthfulness, labor force participation, and growing population rate.
This year’s report features photographs of real people and families in Houston, Texas who bought a home in the last year. The Houston Photography Project was shot by Adriel Salazar of Master Space Media. Houston, Texas continues to be one of the nation’s top opportunity markets for new Latino homebuyers and ranks the top markets adding the greatest number of net new homeowners over the last two years.
“Latinos continue on an 8-year homeownership growth trajectory despite home price appreciation and soaring interest rates once again demonstrating a resilience that will help fuel economic growth and prosperity for an increasing number of American households,” said Gary Acosta, NAHREP Co-Founder & CEO.
“The vibrance and momentum of Latino homeownership growth will continue with the increasing number of new Latino households, the entrance of younger homebuyers, and more lenders bringing SPCPs to market to the mortgage-ready Latino homebuyer,” said Nuria Rivera, NAHREP 2023 National President.
- Latinos are the only demographic that saw nearly a decade of consistent homeownership growth. The Hispanic homeownership rate reached 48.6 percent in 2022, marking 8 years of steady homeownership growth.
- Despite record-breaking affordability challenges, Latinos continue to increase their homeownership rate. In 2022, Latinos added a net total of 349,000 homeowner households, one of the largest single-year gains for Latinos in the last ten years.
- Latinos are forming new households rapidly, a key precursor to homeownership. In 2022, Latinos formed 628,000 new households, the largest single-year gain in over a decade, the largest of any demographic group, and more than double that of non-Hispanic White households.
- Latinos are young and buying houses younger. With a median age of 30, Latinos are eight years younger than the general population. They also trend younger as homeowners. Latinos have the highest share of homebuyers under the age of 25, and 70.6 percent of Latinos who purchase a home with a mortgage in 2021 were under 45.
- Homeownership is the least affordable it’s ever been. In April of 2022, home price appreciation hit a new record high of 20.1 percent. At the same time, interest rates on the average 30-year fixed-rate mortgage started to climb, reaching over 7 percent in October of 2022, the highest in 20 years.
- Latinos are more mortgage-ready than ever before. In 2022, there were 7.9 million Latinos aged 45 or under who have the credit characteristics to qualify for a mortgage and 2.8 million who are near mortgage-ready. Latinos have the largest share of the near mortgage-ready population of any racial or ethnic group.
- Despite affordability challenges, the rise in interest rates may benefit some first-time homebuyers. While the rise in interest rates compounded affordability issues, it also had a cooling effect on the market, greatly reducing competition. Nearly half, 11 out of 25 participants, in NAHREP Top Real Estate Practitioners Survey said their first-time buyers had a harder time getting their offers accepted in the first half of the 2022 market than in the second half.
- Latinos will get creative in order to overcome affordability challenges, including living in multigenerational households and co-borrowing among family. Latinos are among the most likely demographic to live in a multigenerational household at 31.7 percent. In 2022, 7 out of 25 participants in NAHREP’s Top Real Estate Practitioners Study saw an increase in multigenerational buyers last year, while 19 out of 25 reported an increase in co-borrowing, particularly among family members.
- The state of Texas offers the greatest opportunity for Latino homeownership. Between 2020 and 2022, Texas saw a net gain of nearly 150,000 Latino residents. McAllen, Brownsville, and El Paso, Texas also made up the top three opportunity markets for Latinos, based on the number of mortgage-ready Latinos and affordability. Houston, Texas was the third highest-ranking market that added the greatest number of new Latino homeowners, adding a net total of nearly 60,000 homeowner households in the last two years.
- The increase in Special Purpose Credit Programs (SPCPs) could play a promising role in closing the non-Hispanic White and Latino homeownership gap. Recent legal clarity by the Department of Housing and Urban Development (HUD) has encouraged more lenders to bring SPCPs to market, opening the door for new programs that could address common underwriting issues, such as debt-to-income ratios and non-W2 incomes, two factors that disproportionately impact the Latino community.
The National Association of Hispanic Real Estate Professionals® (NAHREP®), a nonprofit 501(c)6 trade association, is dedicated to advancing sustainable homeownership for the Hispanic community in America. NAHREP has a network of over 40,000 real estate professionals and 100 local chapters nationwide, hosting several national events per year and publishing multiple industry cornerstone reports annually. Join us in advocating for policies that grow sustainable Latino homeownership, read our 2022 policy priorities here. Also, see the NAHREP Hispanic Homeownership by Congressional District Tool which measures Hispanic homeownership by U.S. congressional district, allowing constituents, advocates, policymakers, and lending and housing professionals to evaluate district performance at a glance. Watch the Hispanic Homeownership Short Film!