Hispanics are the fastest growing group of first-time home buyers, and have the purchase power to push the U.S. housing recovery into high gear now if inventory shortages and investor-favored regulations didn’t challenge them, according to the 2012 State of Hispanic Homeownership Report published this week by the National Association of Hispanic Real Estate Professionals (NAHREP).
The 24-page document offers an update on the Hispanic homebuyer market and traces the minority group’s rise in household formations, jobs, income and education – variables that make them homeownership-ready and able to drive demand in the current first-time homebuyer market. A digital copy of the report is available for download here.
“Despite a difficult economic environment and a tight mortgage market, Latinos are making gains in all the ways that make them ready for homeownership,” says Juan Martinez, the newly elected president of NAHREP. “Their biggest obstacle now coming into the market isn’t the credit crunch, it’s the lack of available housing to purchase. They will play an increasingly significant role in the nation’s home purchase market, if conditions permit.”
According to the report, Hispanics continue to lead the surge in U.S. homeownership and accounted for 355,000 or 51 percent of the total net increase of the 693,000 owner households. This trend has unfolded over the past 12 years and shows homeownership gains in all but two of those years, despite losses suffered during the foreclosure crisis. The number of Hispanic homeowners grew from 4.24 million in 2000 to 6.69 million in 2012, a remarkable increase of 58 percent at a time when the rest of the U.S. population saw a net increase of only 5 percent.
Notably, the data indicates that while the Hispanic homeownership rate has dropped from 47.5 percent to 46.1 percent since 2010, the total number of owner households has increased by nearly 500,000. This is due to the net increase of more than 1 million total Hispanic households in the U.S. during the same two-year period. As their population soars and Latinos start to buy housing en masse the most outstanding metric of their impact will be the total owner-occupant housing units purchased, not the homeownership rate.
The report, which was researched and produced by NAHREP, asserts that a combination of economic and demographic trends explain why this colossal consumer segment will be a reckoning force behind the revitalization and growth of the nation’s economy for the foreseeable future. Some of the key statistics highlighted in the report include:
Population Driver: Hispanics continue to lead population growth in America. Hispanics have accounted for more than half of the U.S. population increase over the past decade. Every month, 50,000 young Hispanics reach the age of 18. More notably, Hispanics dominate household growth. Over one million Hispanic households were formed in 2012, compared to a decrease of 704,000 non-Hispanic White households.
Education: Hispanics are achieving higher educational milestones. Hispanics are now the largest minority group on the nation’s college campuses. In 2011, the number of 18 to 24-year-old Hispanics enrolled in college exceeded two million and reached a record 16.5 percent share of all college enrollments.
Employment and Income: Hispanics are dominating the growth of the nation’s workforce. In 2012, Hispanic job growth accounted for approximately half of total U.S. job growth. They are also earning more. Forty percent of Hispanic households earned over $50,000. Hispanic households earning more than $50,000 are growing at a faster rate than that of the total number of U.S. households.
Consumerism: Hispanic purchasing power exceeds $1 trillion. The purchasing power of Hispanics is estimated to be $1.2 trillion and is projected to grow to $1.5 trillion by 2015.
Homeownership: Hispanics continue to lead the surge in U.S. homeownership. In 2012, Hispanics accounted for 355,000 or 51 percent of the total net increase of 693,000 owner households in the U.S. Surveys show they remain passionate about homeownership. Fifty-six percent of Hispanics said that a major reason to buy a home was because it represents a symbol of success or achievement, compared to only 32 percent of all Americans.
Hispanic real estate leaders assert that despite historic low rates and housing values and the sizable opportunity this market presents, large investor controlled housing markets threaten the growth of Hispanic homeownership. Specifically, government and corporate policies like REO to rental programs have removed affordable housing stock from the owner-occupied market, creating an imbalance in supply and demand. This constitutes the most significant barrier to Hispanic homeownership, according to NAHREP leaders.
“It is critical to understand the demographic trends which are likely to impact housing demand in the years ahead. This report provides information for lenders, builders, and policymakers regarding the future shape of housing demand, which will be substantially impacted by the housing choices of Hispanic households,” says Mike Fratantoni, Vice President of Research and Economics for the Mortgage Bankers Association.
For more information, visit www.nahrep.org.
Copyright© 2016 RISMedia, The Leader in Real Estate Information Systems and Real Estate News. All Rights Reserved. This material may not be republished without permission from RISMedia.
Content on this website is copyrighted and may not be redistributed without express written permission from RISMedia. Access to RISMedia archives and thousands of articles like this, as well as consumer real estate videos, are available through RISMedia's REsource Licensed Content Solutions. Offering the industry’s most comprehensive and affordable content packages. Click here to learn more! http://resource.rismedia.com