The Hispanic Housing Market: The Future of Homeownership

We’re currently in the midst of National Hispanic Heritage Month, which takes place from September 15th to October 15th.^[i] During these 30 days, many Latin American countries celebrate their independence. In light of this month-long celebration, we want to highlight the growing population of Hispanic homebuyers.

As of 2020, the United States was home to over 62 million Latinos.^[ii] Between 2020 and 2040, it’s projected that 70% of new homeowners will be of Hispanic heritage.^[iii] With these figures in mind, it’s important for lenders to understand the unique needs of this growing population and learn how to meet them.

Below, we’ll review some notable statistics about the Hispanic home market. We’ll also provide mortgage lenders with some tips on how to support Latino homebuyers.

Table of Contents

Interesting Statistics About the Hispanic Home Market

To start, let’s review some statistics laid out by the National Association of Hispanic Real Estate Professionals’ 2021 State of Hispanic Homeownership Report:^[iv]

- From 2019 to 2021, the rate of Hispanic homeownership in the U.S. rose from 47.5% to 48.4%.
- During this time frame, 657,000 Latinos became new homeowners.
- By 2025, it’s estimated that Latinos will reach a homeownership rate of 50%.

These statistics showcase a steady increase in Hispanic homeownership. In turn, future-focused lenders should start brainstorming how they can better serve this growing market.

A Large Portion of Latinos Are Prime Home-Buying Age

Another reason to turn your attention to this market of homebuyers is their age. In 2021, the median age for American Latinos was 30 years old. Interestingly, the median age for first-time home buyers in the United States is 33, placing a significant portion of Latinos in this category.^[v]

Hispanic homebuyers also tend to purchase their homes younger than the general population.
In 2021, 34% of first-time Latino homeowners bought their homes between the ages of 18 and 24, compared to just 17% of the general population.^[vi] With so many Next Generation Latinos considering homeownership, they’re not a market you can afford to ignore.

Challenges Faced By Hispanic Homebuyers

Regardless of one’s background, the housing market is quite hostile right now. That’s because home prices are high and housing inventory is limited.

In addition to these widespread hurdles, Hispanic homebuyers face some unique challenges, as displayed by these statistics:^[vii]

- Latinos are 81% more likely to be denied a home purchase than non-Latinos.
- 69% of Hispanic homebuyers engaged in bidding wars during their home-buying journey in 2021.
- Latinos are twice as likely to finance their homes using Federal Housing Administration (FHA) loans than non-Hispanic white homebuyers.
- 85% of surveyed real estate practitioners reported that their FHA borrowers faced competitive disadvantages.

- 17% of surveyed real estate practitioners said that their FHA borrowers gave up on their home search altogether.

Some of these struggles can be explained by the fact that Latinos are more likely to shop for homes in places that are facing scarce housing inventories, such as Florida, Texas, California, and Arizona.

These locations are also experiencing higher-than-average home appreciation rates. In 2021, houses appreciated by a historic 15% across the country. In areas with high concentrations of Latinos, the appreciation rate was even higher. For example, Arizona home values went up by 28.6%, while Florida home values rose by 25.6%—both well above the 15% nationwide average. Higher home appreciation has made houses that much less affordable.^[viii]

Another barrier has been the steep competition seen throughout the real estate market. An astounding amount of homes have been selling above their asking prices. Since mortgages can’t account for this difference, homebuyers must come up with even more cash to put down to compete.

How Can Lenders Help Hispanic Homebuyers?

After reviewing these numbers, two things are clear:

1. Hispanic homebuyers are only becoming more prominent in the housing market.
2. Hispanic homebuyers may need some extra help overcoming market challenges.

As a mortgage lender, you’re in an ideal position to provide the type of support that can get more Latinos into homes.

To help you do just that, we’ve compiled a list of tips to tailor your offerings to Hispanic homebuyers:

#1 Provide Lending Materials in Both English and Spanish

The process of applying for a mortgage and purchasing a home is complicated enough without doing it in your second language.

You can make your mortgage lending business much more friendly to Hispanic homebuyers by providing documents in both languages. Fannie Mae has several multi-language resources you can use.

Thanks to Google translate, generating Spanish documents on your own shouldn’t take too much time or effort either. Just make sure to have a native Spanish speaker on your team review them to ensure they’re free of flaws.

#2 Hire Bilingual Staff

In addition to providing Spanish lending materials, you may also want to hire more bilingual staff. Many Hispanic homebuyers may prefer speaking to mortgage brokers about their questions and concerns in their primary language.

It’s also a good idea to have a bilingual receptionist. After all, your receptionist is often the first person new clients engage with when vetting your mortgage lending business.

Keep in mind that many people who apply to work at your company may claim to be bilingual. To ensure these applicants are at the level of fluency they need to be to adequately serve your clients, you may want to consider conducting your interviews in their second language.

#3 Emphasize Diversity, Equity, and Inclusion (DEI)

If you’re not refining your DEI efforts in 2022, you’re falling behind. Having a diverse team can help your mortgage lending business better serve borrowers of all backgrounds.

For example, consider the housing market in Florida. Many aspiring homeowners in this state are of Caribbean descent. The housing market throughout the Caribbean is quite different than it is in the U.S., so Caribbean homebuyers may need extra education. Having a Caribbean mortgage broker on your staff can be invaluable in this situation, as they may be better equipped to break down these housing market differences and bridge cultural barriers.

This sentiment reigns true, no matter what state you’re operating in. Having a team that reflects the demographics of your housing market can set you up for success. Many big banks are already employing this strategy because they understand the value of representation, both for their business and their borrowers.

Unfortunately, many lenders have yet to catch up with big banks in this regard. The mortgage industry’s workforce is only 7% Hispanic.^[ix] Meanwhile, Hispanics represent 19% of the general U.S. population,^[x] highlighting the need for greater representation.

#4 Educate Hispanic Homebuyers Online

A lack of education is one of the leading obstacles that modern homebuyers face, regardless of their background. The reason? Credit management, mortgage lending, and the home-buying process are rarely taught about in school.

As a mortgage lender, you can do your part to solve this issue by providing borrowers with educational materials yourself. Fortunately, it’s easier than ever to connect with young Hispanic homebuyers—they’re living on the internet, just like most other millennials and Gen Zs. Here are some ways you can educate them online:

- Post blog articles about home-buying topics tailored to Hispanic audiences
- Create educational videos on Youtube
- Share helpful content on Instagram, TikTok, and Facebook

If you can post both English and Spanish versions of your content, you’ll be one step ahead of the competition in terms of winning over Hispanic homebuyers’ attention and trust.

#5 Host Spanish-Speaking Mortgage Seminars In Your Area

While the internet allows you to reach a vast audience of borrowers, in-person seminars can help you connect with people who are searching for homes in your city.

Make sure your seminars feature bilingual speakers and real estate experts who understand the unique challenges Hispanic homebuyers face. By connecting with borrowers in person and discussing issues that resonate with them, you’re much more likely to win over their business.

#6 Engage With Real Estate Agents

Many homebuyers interact with real estate agents before they ever start looking for a mortgage. As a result, it’s very important that the information they receive from these professionals is accurate and up to date.

Unfortunately, not all real estate agents understand the ins and outs of credit as well as mortgage lenders do. To ensure Hispanic homebuyers receive consistent information, help educate local real estate professionals on credit-related topics whenever you can.

The Benefits of Supporting Hispanic Homebuyers

As we’ve already established, modifying your mortgage lending practices to support Hispanic homebuyers can be wonderful for business. However, the benefits go far beyond that.

As any homeowner knows, owning property is empowering. In turn, helping individuals in underserved communities purchase the homes of their dreams can be an incredibly rewarding experience.

Assisting Latinos in the home-buying process can also help you strengthen the community in your city. Stronger communities improve the quality of life for everyone involved.

Certified Credit: Innovative Tools To Help You Grow Your Mortgage Lending Business

In summary, the Hispanic home market presents many worthwhile opportunities for mortgage lenders and will continue to do so in the coming years. By implementing the steps we’ve outlined above, you can capitalize on these opportunities and become a much-needed agent of change.

If you want to learn more about this topic, make sure to check out our Talk Data to Me podcast episode with Marisol Pintato, Certified Credit’s Client Success Manager of Puerto Rico, and Dalila Ramos, Founder of Love and Tacos Media and host of Taco Tuesday on LinkedIn. We discuss their experiences as Latina women in the mortgage industry and other trends we’re seeing in the Hispanic home market.

If you need any tools to help you originate more loans for Latino borrowers, Certified Credit has you covered. We offer the following products and services: