Increased Hispanic Homeownership Can Be the Engine of Economic Growth — RISMedia
The first rule of capitalism is, “Go where the growth is.” The Urban Institute estimates that 70% of homeownership growth in the next 20 years will come from the Hispanic community. Rising inflation, gas prices, housing prices and interest rates are making housing affordability even more challenging in a market already dealing with historically low housing inventory. Tapping into a growth cohort with $1.7 trillion in purchasing power can help any company not only survive, but thrive in the coming years.
Focus on migration trends
Hispanics are moving to where the jobs are and where housing is more affordable. The National Association of Hispanic Real Estate Professionals’ (NAHREP®) 2021 State of Hispanic Homeownership report showed that there are 8.3 million mortgage-ready Hispanics who don’t currently have a mortgage. A large percentage of these potential buyers were in Texas, Arizona, Florida, North Carolina and Wisconsin, where the largest spikes in Hispanic homeownership occurred during the last year.
You don’t have to be Hispanic, but it helps
Real estate is still a relationship-driven business. This is even more true for Hispanic consumers who value trust in their purchase decisions more than price or brand. You don’t have to be Hispanic to serve Hispanic consumers, but companies that are culturally competent and who have employees that mirror the customer will have an advantage.
Products
More than 50% of Hispanic homebuyers are first-time buyers, and while Hispanics are rapidly closing the income gap, the wealth gap between Hispanics and non-Hispanics is still large. Companies that are proficient in working with first-time buyers and who have relevant, low down-payment loan products will generally do well in the Hispanic market. However, in markets like San Diego and Miami, Hispanics are also driving home sales in luxury markets.
Marketing
Marketing to Hispanics can be tricky. Some believe that Spanish-language marketing is essential. The fact is that 75% of real estate transactions involving Hispanics are conducted primarily in English. This still means that 25% are done in Spanish, but that number is trending downward. Whether in English or Spanish, Hispanics want to work with people they trust and who connect with them on a personal level.
With an average age of 29, Hispanics are the youngest demographic in America. This means that the majority of Hispanic adults are just entering their prime home-buying years. Hispanics also have the highest workforce participation rate and are almost twice as likely to own a small business. For decades, companies that focused on the needs and wants of baby boomers outperformed their competitors. One demographer described the Hispanic-American economy as today’s baby boomers.
Gary Acosta is an entrepreneur, public policy advocate and investor. He is the co-founder and CEO of the National Association of Hispanic Real Estate Professionals (NAHREP®). With a network of over 40,000 professionals and 100 local chapters, NAHREP is the nation’s largest Hispanic business organization.
