A new analysis from the Urban Institute [1] details the priorities and measures experts are taking to help expand and sustain Latino homeownership nationwide. According to U.S. Census Bureau data, the Latino homeownership rate was 50.6% in 2021, representing the highest rate for Latinos since 2009.
Latinos account for an increasingly large share of the population, particularly in younger generations poised to form households and enter prime homebuying years.
Urban Institute's Laurie Goodman and Jun Zhu estimated in 2021 that between 2020 and 2040, approximately 70% of net new homeowners will be Hispanic, and no net new homeowners will be white. They also projected that by 2040, more than 20% of younger households—defined as households headed by those younger than 65—will be Hispanic.
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"About 50 to 75% of the actual homeownership gap between white and Hispanic households can be accounted for by 'endowments'—location, income, marital status, family composition, for example," said Paul E. Carrillo, Professor of Economics at George Washington University. "To close the gap, we have two possible approaches. If income and education are a constraint, then we must go into those communities and fix those things. [And] we have to solve the remaining 25% of the gap that is unexplained."
For the momentum in U.S. homeownership to be sustained by Latinos, the finance, housing, and urban planning ecosystems need to adapt. Recognizing the importance of this inflection point and the potential for Latino families to realize homeownership’s promises and advantages, UnidosUS launched the Home Ownership Means Equity (HOME) initiative to increase the Latino homeownership rate.
Specifically, Urban Institute looked at what is known (key findings from research) and what questions remain (critical research gaps) for six topic areas:
- Topic 1: Historical context, including redlining and other racialized history, that contributed to current barriers and gaps, as well as opportunities, for Latino homeownership.
- Topic 2: Unique structural challenges Latinos face on the path to achieving homeownership, as well as solutions and opportunities. Challenges include language barriers, being a first generation immigrant, family financial obligations (e.g., remittances), family size, student loan debt, income considerations (e.g., non-borrowing family members who contribute to the rent or mortgage), multiple income sources, seasonal or fluctuating income sources, and non-cash income.
- Topic 3: How macro-level conditions (e.g., employment sector outlook), political climate, immigration laws, ethnic enclaves, race, country of origin, generation in the US, age, and other intersectional factors influence Latino homeownership.
- Topic 4: The relationship between housing supply and Latino homeownership and potential solutions to meet Latino-specific needs.
- Topic 5: Applied study or research on Individual Tax Identification Number (ITIN) mortgages.
- Topic 6: The potential and pitfalls of financial technology (fintech) on Latino homeownership.
According to the National Fair Housing Alliance [3], there was never a time in American history when Latinos participated in the financial mainstream to the same degree as their white counterparts: “Our financial markets” have always been “separate and unequal” (see report citation). These barriers in housing finance reflected broader anti-Latino discrimination.
While advancing Latino homeownership remains important, combating racial disparities in housing for all Americans will continue, and hopefully the nation will see equality in housing across the board in the years to come.
To read the full report, including more data, charts and methodology, click here [1].