In the decades following the Great Depression, government-guaranteed loan programs and favorable tax policies helped the U.S. homeownership rate improve steadily, rising to an all-time high in 2006, when nearly 70 percent of U.S. households owned a home.
A little over ten years ago, when sub-prime lending got out of control and foreclosures spiked, that trend reversed. Homeownership in America has declined precipitously to a current rate of roughly 63 percent. In 2015, Hispanics began to buck that trend, and over the last two years Hispanics have been the only ethnic demographic with an improving homeownership rate.
The ultimate goal
For many Hispanics, homeownership is the ultimate goal and pinnacle of success in America. The home is the center of the family experience. Ownership is so prized that it is not uncommon for two or more families to pool their resources together to purchase that first home. At a median age of 27 years, Hispanics are more than ten years younger than the overall population and are just entering their prime home-buying ages.
They represent three out of every four new workers added to the labor force and have the highest work force participation in the nation. These data points coupled with strong consumer demand have prompted the Harvard Joint Center for Housing Studies to estimate that, over the next decade, 50 percent of all new homeowners nationwide will be Hispanic.
As the country continues its recovery from the worst foreclosure crisis in nearly a century, the health and wellbeing of the housing industry will depend on a steady flow of first-time buyers to prop up the market. Each year, more of the buyers are likely to be Hispanic. In fact, barring major changes in government housing policy, nearly 500,000 new Hispanic homeowners each year will be able say “bienvenidos a mi casa” for the first time.
Gary Acosta, CEO, NAHREP, [email protected]