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As the grandson and nephew of Cuban political prisoners who fled from Cuba in the 1960s, I was really excited to read the 2023 NAHREP State of Hispanic Home Ownership Report.
In its fourteenth year of publication, the report is a product of the National Association of Hispanic Real Estate Professionals (NAHREP) and the Hispanic Wealth Project. It synthesizes research from multiple data sources to get a read on U.S. Hispanic homeownership gains and identify both opportunities and barriers to increasing Hispanic homeownership.
Of course, I keyed in on the homeownership gains in the report, knowing how important it was for my parents, who had given up everything when they left Cuba for Miami, to become homeowners. In 2023, the Hispanic homeownership rate reached 49.5 percent, with a net gain of 377,000 Hispanic owner-households from the year prior. Today, over 9.5 million Hispanic households own their own home.
This is truly great news, and it made me smile.
When I combined this great news with some data from NAHREP’s 2023 Hispanic Wealth Report that came out earlier this year, I smiled even wider. When the Hispanic Wealth Project started this effort in 2014, the goal was to triple median Hispanic household wealth by 2024.
As a testament to the commitment of the countless people who contributed to this effort, that goal was met two years ahead of schedule. In 2022, Hispanic household wealth rose to $63,400. In 2013, it was $19,998.
As a result of this, the proportional wealth gap between Hispanic and non-Hispanic White households has been cut in half.
How homeownership and wealth rates align
The exciting part about these gains in Hispanic wealth is that much of it can be related to increased homeownership rate, and as a real estate guy, I can get behind that. In 2013, Latinos held just over a quarter (26.7 percent) of their net worth in their homes.
In 2022, exactly one-third of Hispanic household wealth could be attributed to home equity, or equity held in a primary residence — a substantial increase.
For decades, homeownership has been the main source of wealth for all American families; therefore, increasing the Hispanic homeownership rate is critical.
In 2013, the Hispanic homeownership rate hovered around 46.1 percent. The Hispanic Wealth Project sought to increase the Hispanic homeownership rate to 50 percent and it’s so exciting to note that we are just shy of that goal, with a homeownership rate of 49.5 percent.
This is just two-tenths of a percentage point away from the highest Hispanic homeownership rate reached so far, which was 49.7 back in 2006 and 2007. We are so close to reaching the goal of 50 percent.
Hispanic clients present an untapped opportunity
With challenges existing between high interest rates, home price appreciation and low inventory, it’s harder to become a homeowner. But it’s important for all of us in the real estate industry to know the tremendous opportunity that comes with working with Hispanic clients.
Latinos are driving household formation growth in this country and as they get priced out of expensive markets, they are willing to relocate. They are also more willing to enter into co-borrowers or co-occupant arrangements.
Finally, there are many local financial incentives and programs out there that can help lessen the financial burdens of a home purchase, particularly for first-time buyers.
So, what does this all mean? It may take some creative problem-solving to help Hispanic clients buy a home. To that end, I encourage everyone in the real estate industry to be part of the solution and achieve that 50 percent homeownership rate.
Alex Vidal is the president of ERA Real Estate.
