More Latinos are becoming homeowners 

Despite historic affordability challenges, the Hispanic homeownership rate continued to climb last year, reaching 48.6%.

That was a key finding in the 2022 State of Hispanic Homeownership Report, released today by the National Association of Hispanic Real Estate Professionals (NAHREP) in conjunction with its annual Homeownership and Wealth Building Conference this week.

With eight years of rising homeownership, Latinos are the only demographic to show nearly a decade of consistent homeownership growth, according to the report.

The increase in share of homeownership was particularly notable given that Latino household formation grew "monumentally" last year, said Jaimie Smeraski, Policy, Learning and Research Director for NAHREP. That meant homeownership among Latinos had to increase "exponentially" she said.

In 2022, Latinos formed 628,000 new households, the largest single-year gain in over a decade. It was also the largest of any demographic group, and more than double that of non-Hispanic white households — a reversal from the previous two years. At the same time, Latino homeowner households grew by 349,000

"Despite market challenges, the future of homeownership growth will continue to rely on Latinos, given that they are young, growing in population, and rapidly forming new households," according to the report. 

Smeraski said Hispanic values put a particularly strong emphasis on homeownership and the resulting connection to community. "It's very important from a family perspective," she said. 

The report highlights several other factors contributing to the growth of Hispanic homeownership:

• Latinos are more mortgage-ready than ever before, with 7.9 million Latinos aged 45 or under having credit characteristics to qualify for a mortgage, with another 2.8 million near mortgage-ready.

• Latinos are more likely to live in multigenerational households and co-borrow with family members to help overcome affordability challenges. According to the report, 31.7% of Hispanic Americans live in a multigenerational household.

• Median household income for Latinos is growing faster than for the population as a whole. Over the past decade, Latino median household income has grown by 49.9%, outpacing the overall income growth of 35.7%. Despite the growth, the median household income among non-Hispanic white households remains 24.5% higher than Latino households.

The report also suggests that as affordability is a particular problem in larger cities where Latino populations tend to be concentrated, those buyers will seek out opportunities in new markets.

"The willingness to make sacrifices and pool resources demonstrates [Latinos'] eagerness to find a way," the report concluded. "Whether that be moving to a more affordable neighborhood, migrating to more affordable states, pooling resources with family, living in multigenerational households, or co-borrowing, resiliency is there."

The report specifically calls out Texas as attracting the most net Latino migration and the greatest number of new Latino homeowners, adding 150,000 new Latino residents between 2020 and 2022. Texas has consistently been a top state for relocating buyers over the past few years.

The Texas cities of McAllen, Brownsville and El Paso were listed as the top "opportunity markets" for Latinos. The ranking looked at the number of mortgage-ready Latinos, the share of Latinos who could afford a median-priced home, and the metro's housing stock. In the top three cities, nearly 40% or more mortgage-ready Latinos could afford a typical home. 

Ironically, a desire to find a permanent home is behind some of that migration. "There's a strong drive to set roots down, to find a place where you can purchase a home," Smeraski said. "Latinos are willing to migrate to places with more opportunities to own a home."

Smeraski said an increase in special purpose credit programs — programs which help borrowers who might otherwise be denied credit — could play a role in closing the homeownership gap by helping Latino buyers overcome debt-to-income thresholds and allowing them to claim non-W-2 income sources. "Latinos tend to be entrepreneurial," she said, which can make traditional mortgage processes a barrier to homeownership.

With the growth of the Latino demographic, the report pointed to a need for more diversity in the real estate industry. "Despite the critical role Latinos play in homeownership growth, housing production, and the overall housing market, Latinos remain underrepresented throughout the real estate industry," the report noted.

As Latinos continue to account for an increasing share of homeownership growth, attracting real estate professionals who can understand their language and culture will be crucial, the report concluded.