Latinos are on track to reach the goal set by the Hispanic Wealth Project (HWP) of a median $45,450 household wealth by 2024, further narrowing the non-Hispanic white/Latino wealth gap.
According to the 2021 State of Hispanic Wealth Report, recently published by HWP and the National Association of Hispanic Real Estate Professionals (NAHREP), there are several factors driving wealth for this segment of the population, but real estate takes the lead: residential property values make up more than half (52%) of Latino assets, driven by both homeownership and investment property ownership.
Home equity continues to build, with Latino equity levels at a median of $95,000 in 2019. Between 2016 and 2019, there were 818,000 net new Latino-owner households—the highest three-year increase since before the Great Recession.
Homeownership continues to bolster wealth gains, with owners reporting 28 times the wealth of renters. According to the report, while Latino renters have a median net worth of $6,210, the net worth for Latino homeowners is $171,900.
Among homeownership trends is a reliance on family, with Latinos the most likely demographic to live in a multigenerational household. Forty-one percent report having at least three incomes supporting their household and 50% either pool all incomes to pay for all or at least some expenses, including rent or mortgages—the highest of any demographic.
Latinos are also heavily investing in real estate, with the demographic increasing their ownership of investment properties by 33.1% between 2016 and 2019.
While there has been progress, however, hurdles still exist. Down payment continues to be the single-largest barrier to homeownership. Over 36% report not having enough saved for a down payment as their primary reason for not buying a home.
Additionally, the pandemic introduced added challenges for existing homeowners. As of March 2021, 8.4%of Latino home loan borrowers were in forbearance, and 0.7% of Latino borrowers were at least 60 days delinquent. According to the report, the demographic is 2.3 times more likely to be in forbearance and 1.5 times more likely to be delinquent than non-Hispanic white borrowers.
Despite these roadblocks, the report says 53% of survey respondents expect to purchase a home in the next five years, with 36% of Latinos planning to buy an investment property within that time frame, continuing to build demand for real estate.
Liz Dominguez is RISMedia’s senior online editor. Email her your real estate news ideas to firstname.lastname@example.org.