The future of homeownership is Hispanic. That isn’t an overstatement—Hispanics continue to increase their homeownership rates and are expected to account for most of the homeownership growth in the coming decades.

Real estate professionals and lenders share both a unique opportunity and a social responsibility to educate Hispanic and Latinos about the value of homeownership—not just as a roof over their heads but as a sound financial investment to build generational wealth. Additionally, first-time Latino homeowners set a precedent for future generations of their families to become familiar with the process and vested in reaping the benefits of owning their own homes. It makes good business sense for the housing industry to be well-equipped to serve this growing demographic.

By the Numbers

Statistics related to the burgeoning levels of Latino homeownership are compelling:

  • In 2020, Latinos increased their homeownership rates for the sixth consecutive year, according to the National Association of Hispanic Real Estate Professionals (NAHREP).
  • Over the next 20 years, The Urban Institute predicts that Latinos will account for 70% of homeownership growth.
  • Since Latinos are more likely than other demographics to purchase homes at a younger age, and millennials are more racially and ethnically diverse than other generations, younger Latinos are especially poised to play a vital role in accelerating household formations; U.S. Census Data says nearly one in three Latinos is currently in their prime homebuying years (25-44).

Meeting the Unique Needs of Hispanic Homebuyers

Serving this community begins with an understanding of home preferences. A 2020 Freddie Mac survey of real estate professionals revealed that the most sought-after feature is location, which includes workplace proximity, cultural connections like shopping and restaurants and a sense of community.

Also important are size and move-in readiness—factors often related to the tendency of Hispanic families to live in multi-generational households, frequently with three families under one roof.

In my own experience, when I moved back to New York, my mother moved in with us to help us care for my children while I went back to work. This allowed me to pursue my career with the peace of mind that my children had their “abuela” with them when they returned from school. However, it wasn’t so much about having built-in childcare as it was about making sure she had a place in our home that was hers. She has lived with me for over 25 years, and I wouldn’t have it any other way.

The pandemic, which has resulted in family members of many households spending an increasing amount of time together at home, has had an influence on size requirements, too; in 2020, 31% of Latinos said they wanted to upgrade to a larger home because of COVID-19, compared to 25% of Americans who are Black and 19% who are white, according to realtor.com.

Several Key Factors at Play Are Keeping Latinos from Buying a Home

Despite the promising statistics that will continue to drive Hispanic and Latino homebuyers, obstacles remain that are preventing some from realizing the dream of homeownership. Among them are:

  • Lack of available affordable inventory, especially since a large percentage of Latinos have established roots in high-cost markets where a 3% down payment option can be critical as an entry point to homeownership.
  • Financial barriers, which have been exacerbated during the pandemic since unemployment has disproportionately affected Latinos, who account for much of the hospitality, service, and entertainment industries.
  • Multiple offers on a home due to the hot seller’s market.
  • Language and cultural challenges between buyers and the housing/real estate professionals they encounter during the process.
  • Insufficient credit scores or lack of established credit, due to a propensity to use cash for purchases.
  • Lack of financial literacy and confidence in the homebuying process as they might be the first generation in their family to purchase a home. 

Financial Education, Cultural Awareness and Creative Solutions Are the Answers

Only 7% percent of real estate professionals are Hispanic, yet the entire real estate community has the capacity to serve this demographic authentically and successfully.

Paramount is listening to, respecting, and embracing the client’s needs from a cultural perspective, even if it doesn’t directly align with their personal priorities.

For example, it’s important for family-oriented Latinos to live within a close radius of their nucleus, so they may be hesitant to consider a potential home that’s farther out. Likewise, rather than dissuading a smaller family from making an offer on a larger house, keep in mind that they might anticipate needing the extra space for future multi-generational needs. Leaning in will provide a positive experience for the client that fosters trust and loyalty. Other best practices include:

  • Managing expectations with regards to size, location, and affordability.
  • Encouraging lower-priced homes that require sweat equity and renovation funding versus properties that are move-in ready. Every family’s needs are a bit different, and renovations may range in scope. However, Latinos are resilient, unafraid of hard work and driven by helping each other and working together to achieve their family dream.
  • Presenting a wider location radius to open more options.
  • Exploring alternatives like manufactured housing and two- to four-unit properties that can accommodate large families’ multigenerational needs.
  • Offering resources to help lower the entry cost and promote financial education, including grants, down payment assistance and financial literary programs from local not-for-profit housing counselors or housing finance agencies (HFAs). It’s important to homebuyers to start the research well before the transactional stage so they are better positioned to start their journey.
  • Overcoming language barriers by engaging potential homebuyers with community referrals, specific locations and groups and in-language materials. Mortgage Translations, for example, is a collaboration between industry partners that offers mortgage documentation translations into five languages including Spanish.

When it comes to meeting the needs of Hispanic and Latino homebuyers, it takes a village. Diverse professionals who are connected to the growth markets, proactively positioning their companies by championing and partnering with organizations and communities focused on outreach, will make a profound difference.