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As we enter Hispanic Heritage Month, U.S. Mortgage Insurers outlined how the Hispanic population has been a major contributor to homeownership growth in the U.S. That's not all, the findings from the USMI survey also revealed that the demographic is poised to be a leading driver in the segment for the next four decades.
The USMI cited a 2020 U.S. Census Bureau Report, that revealed the Hispanic population will be the primary contributors to the U.S. population growth over the next 40 years.
“Economic barriers and housing supply challenges for this population continue to keep homeownership out of reach for many of these potential homeowners. The income gap between Hispanics and non-Hispanic Whites remains steep, with non-Hispanic White households having a median income 26% higher than that of Hispanic households,” according to the USMI.
“In 2019, the median Hispanic household income was $56,113 (U.S. Census Bureau). Additionally, according to the National Association of Hispanic Real Estate Professional’s (NAHREP) 2020 State of Hispanic Homeownership Report, Hispanics also tend to have higher debt-to-income (DTI) ratios and lower credit scores, and given the youth in the Hispanic community, first-time homebuyers drive Hispanic homeownership gains. In 2019, 56% of Hispanic homeowners indicated that they were living in the first home they had ever owned, as reported by the U.S. Census Bureau’s 2019 American Housing Survey. Therefore, Hispanic homebuyers are an important demographic served by low down payment mortgage products, which benefit first-time and low- to moderate-income homebuyers primarily by bridging the down payment gap.”
That's not all, USMI's 2021 National Homeownership Market Survey of 1,000 adults, including an oversample of Hispanics, reported that 67% of the demographic consider owning a home as “very important.” Additionally, 53% of Hispanic respondents reported that they had experienced housing problems during the COVID-19 pandemic.
Of those issues, the primary concerns included evictions and falling behind on rent or mortgage payments. Despite the demographic being quite important in homeownership growth across the U.S., the survey showed that there are still many barriers for the Hispanic population.
According to the survey, 66% of Hispanics indicated that the lack of affordable homes is the biggest housing-related issue.
“Additionally, 20% said that one of the biggest challenges they face when buying a home is the inability to afford a 20%t down payment, as monthly housing costs consume a large amount of Hispanics’ income – nearly 60% said they spend 30+ percent of their monthly household income on housing,” according to the report.
The USMI survey also revealed that 65% of Hispanics suggested there is socioeconomic bias in the homebuying process, with the survey finding that lower levels of income, lack of intergenerational wealth for down payments, and difficulties in the credit scoring system are the most significant barriers for increasing minority homeownership in the U.S.