Hispanics are anticipated to contribute in transformative ways to the U.S. housing market in the coming years, according to an expansive study of the increasingly prominent demographic by the National Association of Hispanic Real Estate Professionals (NAHREP).
Conducting research on Hispanic youth, birth rates, household formation, rising purchasing power, labor trends and educational achievements, NAHREP concluded that all of the necessary details and trends for Hispanics point to a coming surge in homeownership.
Carmen Mercado, president of NAHREP, spoke to the impact Hispanics will have on housing.
“Despite recent losses suffered by Hispanics during the housing crisis, young Latino families that were unaffected by foreclosure or lost home values are ready to enter the market,” Mercado said. “When they do, they will have an exponential impact on housing sales.”
Indeed, the economics do seem to be on Hispanic’s side. In 2011, Hispanics claimed 60 percent of the 2.3 million jobs that were added to the economy, and projections estimate they will fill 40 percent of the 12 million new households over the next 10 years. Also, throughout the next four years, the group’s purchasing power is expected to jump by 50 percent.
In 2011′s third quarter, Hispanics accounted for more than half of the country’s growth in owner-occupant homeownership (more than 288,000 units), and NAHREP predicts those numbers will only grow as Hispanics transition from rental housing to single-family properties and condominiums. That trend, Mercado said, is one of the lesser reported on the greater media landscape.
“In recent years, the headlines have focused on foreclosure and wealth losses in the Hispanic community,” she said. “But the untold story is the growth, labor force participation, higher educational achievements and attitudes toward homeownership that are crystallizing into a trend with Latinos taking center stage as a mega force in housing.”
Other findings in the report included: 44 percent of the U.S. population since 1980 has been Hispanic, or 8.9 deaths for every birth (by comparison, Caucasians accounted for 1.1 birth to every death); from 2005 to 2008, Hispanics accounted for more than 50 percent of real consumer economy growth, with Hispanic spending growing by 6.4 percent and totaling $52 billion; from 2009 to 2010, the number of Hispanics enrolled in college increased by 24 percent, and by the end of 2010, 73 percent had finished high school and 32 percent were enrolled in college (the latter statistic an increase of 10 percent from 2000); and, perhaps most importantly, Hispanics are a very mobile demographic, and are willing to relocated to whatever location offers the most employment, from El Paso, to Raleigh, to Omaha.
So anticipated is the Hispanic population’s ascent to homeownership that even lenders are beginning to take notice. David Stevens, the president of the Mortgage Banker’s Association, said everyone in the housing market should do what they can to foster Hispanic demand for homes.
“New household growth will be substantially greater for Hispanics than for any other demographic group in the country,” Stevens said. “The need to recognize the most critical variables in housing type, price range, affordability, and mortgage product terms will be critical for all housing stakeholders – from lenders and realtors to policy makers – in order to ensure that the homeownership needs of Hispanics and other Americans are met.”