Since the early 2000s, the Hispanic population in the U.S. has shown consistent growth. Today, Hispanics are the largest minority group in the country and make up nearly 16.3% of the population in the U.S. There are some states with a larger concentration of Hispanic people than other regions. The states with the largest percentage of Hispanic population as of 2021 include New Mexico, Texas, California, Arizona, Nevada, Florida, Colorado, New Jersey, New York and Illinois. People often think the term Hispanic and Latino are the same. However, there is a difference. The term Hispanic refers to people of Spanish-speaking origin or ancestry, while the term Latino refers to people from Latin America.
Freddie Mac reports that nearly 4.9 million Hispanic millennials were mortgage-ready as of 2018. A large majority of them were located in Texas. According to the U.S. Census Bureau, between 2009 and 2019, Hispanics accounted for around 40% of household formation growth in the U.S. The Bureau also reports that there was an addition of 435,000 Hispanic household formation in 2019. Hispanic housing contribution to GDP has tripled from $110 billion in 2018 to $371 billion in 2018.
Overall, these statistics show that Hispanic homeownership is on the rise, and many millennials are “mortgage ready.” Hispanic homeownership increased for the fifth consecutive year in 2019. Whether it’s home ownership, household formation or labor force participation, the presence of Hispanics continues to outpace other demographic groups in the U.S. It is believed that the Hispanic community will continue to drive growth in homeownership in the U.S. during the post-pandemic period.
However, these numbers can increase even more if some barriers to homeownership could be eliminated for Hispanics. Homeownership for Hispanics is largely affected by their age, income, education level, net worth, type of home, mobility and place of residence. In addition, nativity, country of origin, citizenship status and the number of years they have spent in the U.S. also matter. Hispanics face several barriers during the mortgage qualification and approval process. Many do not pursue homeownership because of these barriers because they believe it will be a complicated and difficult process. Some think it is impossible to achieve. To utilize the potential that this population group holds for homeownership in the U.S., it is important to eliminate barriers for the Hispanic community and implement policies that will further motivate them to buy.
Changes in regulations have helped. The 2010 Dodd-Frank Dodd-Frank Wall Street Reform and Consumer Protection Act helped the Hispanic population avoid toxic loan products. The Community Reinvestment Act has also played a major role in helping Hispanic homebuyers. However, there is still a lot of room for improvement. According to figures from the Home Mortgage Disclosure Act, 19.2% of Hispanic applicants were denied mortgages in 2015 compared to 11% of White and Asian applicants. The primary reason for this denial is because of high debt-to-income ratio and credit history. However, things are looking up as the cost of living in some states makes it possible for Hispanic groups to save and invest in homeownership.
Hispanic homeownership also varies from state to state. This is primarily due to differences in the cost of living as well as the cost of housing. For example, real estate in California can be a great investment. The California Association of Realtors’ Housing Market Forecast reports a high demand from homebuyers. Not only is homeownership a great investment in California, but it can also be a significant improvement in lifestyle because of California’s beautiful beaches, mountain views and excellent amenities. California continues to be a job-creating machine and is a leading state in adding new jobs. Average weekly wages in California are also among the highest in the U.S., with continuous gains year after year. Similarly, the average cost for home insurance in California is $1,031, which is 35% cheaper than the national average. Even though the cost of living in California may be higher compared to other states, residents have a better chance of finding a higher-paying job. Also, with a higher average income, a better quality of living and great weather throughout the year, you can’t go wrong with homeownership in this state.
Homeownership is a natural transition for many of the Hispanics who settle in America. This is how they become an integral part of the community and adopt the next phase of the migration process. Also, the fact that Hispanic homeownership is increasing consistently brings diversity to communities across the country. Hispanics have played an important role in stabilizing the population of the U.S. as it would have otherwise experienced population decline.
Overall, Hispanic homebuyers will continue to be a large part of America’s real estate market growth. Their buying power is on the rise, with the median income of Hispanic households increasing from $46,000 in 2007 to $60,000 in 2017. It is projected that by 2030, Hispanic people will comprise 56% of all new homebuyers.