Hispanic homebuyer mega market is emerging
Hispanic consumers strongly aspire to become homeowners in spite of uncertainty over jobs and the general economy, according to a recent survey by the National Association of Hispanic Real Estate Professionals (NAHREP). The 2011 State of Hispanic Homeownership Report, released earlier this year by the National Association of Hispanic Real Estate Professionals (NAHREP), shows that almost two in three Hispanic renters maintain high aspirations for owning a home.
We’re excited about the information and the opportunities that were revealed in NAHREP’s survey,” said Carmen Mercado, 2011-2012 president of the 20,000-member group. “As Realtors® see an aging American population, these homes will have to be sold as retirees downsize. The Latino population is in a position to make this happen and it’s a great opportunity for Realtors®. If you’re not working with the Latino market, you’re really missing the mark.”
As the demographics have shifted, Mercado said NAHREP is helping organizations find ways to better serve the Latino market. “Language is a plus, but many Latinos are second and third generations so English is their first language. We’ve seen that the larger metropolitan areas are gateways to immigrants but the second and third generations are moving to the suburbs,” she said.
Mercado said it’s important to research the age of diverse first-time homebuyers. “They may be entering the market younger, so if we wait to introduce them to the opportunities of homeownership, we may have waited too long. Understanding what the homebuying demographics in your area are is important to leveraging the opportunities.
While the Latino market was dramatically affected by subprime lending, younger Latino families who were not adversely affected are ready to enter the market now. “Consider what you can do to reach out to this growing market,” she added.
Latinos are expected to account for 40 percent of the estimated 12 million new households over the next 10 years, and their collective purchasing power is expected to jump 50 percent by 2016 – just four short years from now.
Hispanic homeownership grew by 288,000 units in the third quarter of 2011, accounting for more than half the total growth in owner-occupant homeownership in the United States. Hispanic real estate leaders maintain that while this is just a short-term indicator it is an example of what’s to come as Latino echo boomers move from renting to homeownership. They also predict as Latinos start to buy en masse that total owner-occupant housing units purchased – not homeownership rate – will be the most outstanding metric of the group.
The report, which was written by Alejandro Becerra, former housing fellow, researcher and author, asserts that due to a combination of forces Hispanics are poised to become a mega consumer force in housing:
- Population Driver: The Hispanic population expanded 3.5 times between 1980 and 2010. Since 1980, more than two in five (44 percent) persons added to the U.S. population have been Hispanic.
- Consumerism: The Hispanic market made up over 50 percent of real growth in the U.S. consumer economy from 2005 to 2008. During that time span, the $52 billion in new Hispanic spending outpaced the $40 billion in new spending by non-Hispanics, with Hispanic consumer spending increasing by 6.4 percent while non-Hispanic spending increased by only 2.9 percent.
- Mobility: Hispanics are mobile and willing to relocate where employment is available. Hispanics alone drove the population growth of Philadelphia, Phoenix, Indianapolis, Omaha, and Atlanta, and comprised the greatest component of population increases in San Antonio, Fort Worth, and El Paso, and Raleigh and Charlotte, North Carolina.
- Education: From 2009 to 2010, the number of Hispanic young adults enrolled in college grew by 349,000 (a remarkable increase of 24 percent), compared with a decrease of 320,000 among young non-Hispanic Whites. In 2010, 73 percent of young Hispanics completed high school, up from 60 percent in 2000, and 32 percent of young Hispanics were enrolled in college, up from 22 percent in 2000.
Kim Shindle is the Manager of Media Relations at the Pennsylvania Association of Realtors®.