The median household wealth of Latino Americans is expected to triple by 2024, largely due to recent real estate gains. This information comes from data published by the National Association of Hispanic Real Estate Professionals (NAHREP®) at the Latino Focused Business Conference L’ATTITUDE on October 1. Despite the overall blow that Latino wealth took over the Covid-19 pandemic, Latinos Achieve Hispanic Wealth Project (HWP) Goals. Between 2013 and 2019, median wealth increased from $ 15,150 to $ 36,050.
Commenting on trends, Gary Acosta, CEO and Co-Founder of NAHREP®, said, “Latinos continue to lead business start-ups, labor market participation and homeownership growth, surpassing that of other segments of the population. Currently, the Latin American homeownership rate sits at 48%: on track to meet the 50% goal over five years. Residential property values now represent over 52% of Latino assets, a statistic pulled both by homeownership and other real estate investments. In fact, between 2016 and 2019, investment property ownership increased by 33.1%: the largest increase among any demographic.
Read more: Barriers and Opportunities to Growth in Hispanic Homeownership
This is an important development, but the payment of a deposit remains the most important fence to Latin home ownership. According to the HWP 2021 survey, 36% of Latino renters did not have enough savings for a down payment on a home: the highest percentage of any demographic. However, NAHREP® reports that there is misinformation in the Latin American community as to how much is really needed for a down payment. “Our survey shows that significant knowledge gaps continue to prevent Latinos from participating in non-cash financial investments,” Acosta said.
Additionally, data showed that 8.4% of Latinos mortgage borrowers were on hold in March 2021. Coupled with the 0.7% of borrowers who were at least 60% in arrears, it appears Latino borrowers are more likely to be behind on their mortgages. Then again, the gains in home equity among the Latin American community have been solid. In the second quarter of 2021, the average gain in home equity per owner was $ 51,000: the largest average gain in the past 11 years. This means that most borrowers behind on their mortgages have the option of selling or refinancing.
Nonetheless, given that homeownership is a building block for generational wealth, NAHREP® results demonstrate significant progress for Latin American wealth. Young adults who grew up in a home owned by their parents are 7-8% more likely to own a home themselves. Right now, 44% of Latinos fit that description. And the number is increasing. According to the HWP 2021 survey, over the next five years, 53% of Latinos plan to buy a home. Thirty-six percent plan to buy an investment. In total, the proportion of Latinos looking to invest in real estate almost triples that of white buyers.